Rosneft and Indonesian state-owned oil and gas company Pertamina completed the establishment of the joint venture for the development of Tuban grass root refinery and petrochemical complex (TGRR) in Tuban in the East Java province of Indonesia.
The Joint Venture Company (JV) PT Pertamina Rosneft Pengolahan dan Petrokimia (Indonesia) was established in accordance with the Joint Venture Agreement (the ‘JVA’) signed in October 2016. The JVA envisages the following participants shares in the joint venture: Rosneft – 45%, Pertamina – 55% and sets out the JV's governance principles.
Rosneft and Pertamina conducted the project feasibility study and moved to basic engineering and design (BED) of TGRR. The attractive market conditions of Indonesia and the expected consumption growth enabled the working group of Rosneft and Pertamina to develop a competitive concept of the new refinery and petrochemical complex. The parties confirmed possibility of arranging project financing after bankability study performed with the international financial institutions.
The planned refining capacity is 15 mmpta (300 kbpd) and the targeted capacity of the petrochemical complex is over 1 mmtpa of ethylene and 1.3 mmtpa of aromatics. The feedstock for TGRR will be medium and heavy sulfur crude oil grades. The crude oil terminal will be able to accommodate VLCCs of up to 300 thousand tonnes.
TGRR is an important part of Rosneft strategy targeting growth in Asia-Pacific market of refined products.
During Rosneft’s CEO Igor Sechin’s visit to Indonesia in October 2016 Rosneft and Pertamina signed a number of documents for further expansion of the cooperation between the companies. Rosneft and Pertamina signed the ‘JVA’ in order to develop TGRR Project in East Java (Indonesia).
The JV will produce motor fuels for the growing local demand which currently imports a bulk of refined products. Indonesia also experiences strong deficit of petrochemical products such as polyethylene and polypropylene.
Indonesiais one of the most promising and rapidly growing economies in Asia-Pacific. At the same time, the country is a net importer of motor fuels and petrochemical products. Implementation of the JVA will make it possible to expand the Rosneft footprint in the Indonesian energy market and will strengthen the status of the Russian company as a reliable partner in upstream and downstream projects in the Asia-Pacific region.
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