TEMPO.CO, Jakarta - State-owned oil and gas company PT Pertamina is delving into the possibility of Singapore keeping its fuel oil stock in Indonesia's refinery.
"We will purchase fuel oil from Singapore under a long-term contract, though we want the fuel oil stock to be kept in Indonesia," Pertamina Logistics and Infrastructure Director Mulyono noted during a virtual discussion here on Saturday.
Singapore keeping its stock in Indonesia will result in the national stocks increasing, though the fuel oil belongs to Singapore, he explained.
"The stock will only be kept in Indonesia, while the (Singapore) supplier will pay the costs," he remarked.
The fuel oil stock, to be kept in Tanjung Sekong in Indonesia, will be incorporated into a long-term purchase contract with Indonesia. The stock is termed as supplier-held stock.
The advantage garnered from supplier-held stock is that it can augment the national stocks, as it is in the Indonesian waters. Additionally, it can lower distribution costs, he remarked.
Furthermore, capital expenditure is not needed during the early days of the project. It will also reduce the lag time in the stock procurement process and boost the flexibility of stock utilization, he noted.
"Basically, we import fuel oil through Singapore. Hence, we will look into the possibility of cooperation that will benefit us in terms of efficiency and distribution," he added.