Pertamina shuts Balikpapan CDU after fire

Indonesia's state-owned Pertamina has shut a crude distillation unit (CDU) at its 260,000 b/d Balikpapan refinery after a fire at a pipeline earlier today, market participants said.

The duration of the shutdown and impact on refinery production are unclear. The fire may have been caused by a spark while the pipeline was being repaired, Pertamina said.

Gasoline timespreads have strengthened since the incident. September was bid at a premium of around $1.45/bl to October today, after the spread was assessed at about $1.40/bl yesterday.

The increase may also have been driven by strong demand from Pertamina. The refiner issued a tender today to buy 1.1mn bl of gasoline for early September loading from Singapore or Malaysia. It is unclear if the tender is related to the Balikpapan fire.

Indonesia is Asia-Pacific's largest gasoline importer, with purchases at around 200,000-300,000 b/d. The country has been looking to upgrade refineries and build new plants to reduce its dependence on imports. There are plans to increase capacity at Balikpapan and other facilities including the 348,000 b/d Cilacap and 125,000 b/d Balongan refineries, although progress has been slow.