Indonesia's state-owned Pertamina has completed its upgrade of the Balikpapan refinery and has begun operating a new residue fluid catalytic cracking (RFCC) unit today, a move expected to curb gasoline imports and weigh on regional crack spreads.
Indonesia's president Prabowo Subianto has inaugurated the Balikpapan refinery development master plan (RDMP) project, according to the Presidential Secretariat. The upgrade has raised the refinery's overall capacity to 360,000 b/d from 260,000 b/d and added a new 90,000 b/d RFCC unit. Product quality will also improve from Euro 2 to Euro 5 standards.
Pertamina has invested 120 trillion rupiah ($7.4bn) in the project. The RFCC start-up is expected to cut Indonesia's gasoline import requirements, capping regional gasoline crack spreads, traders said. Indonesia is Asia-Pacific's largest gasoline importer, with typical demand at 10mn-11mn bl/month. At full capacity, the RFCC could cut imports by around 40,000 b/d, analysts said.
Indonesia may also see a diesel surplus once it implements mandatory 50pc biodiesel (B50) blending and ramps up Balikpapan output, the country's energy minister Bahlil Lahadalia said in November. The start-up will also reduce exports of low-sulphur waxy residue, which will be used as RFCC feedstock. The refinery may instead export slurry or residual RFCC material, although this could be used for domestic bunkering if volumes are small, a source close to operations said.
The inauguration was initially scheduled for 10 November but was delayed, traders said.
