Iran, Indonesia and Malaysia Agree to Build Refinery

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Researched by Industrial Info Resources (Sugar Land, Texas)--Indonesia's PT Pertamina, the National Iranian Oil Refining and Distribution Company (NIORDC) and Malaysia's Petrofield Refining Company signed an agreement in March to jointly invest $6 billion to build an oil refinery in Indonesia's Banten Province. Pertamina and NIORDC will each hold a 40% stake, and Petrofield will hold 20%.

The refinery will have a designed refining capacity of 300,000 barrels per day (BBL/d) and is expected to start production in 2012. NIORDC President Mohammad Reza Nematzadeh said that by the time the refinery's construction is completion, Iran will supply 50% (150,000 BBL/d) of the crude oil it needs.

Because of the lack of refining capacity in the country, Indonesia's refined oil is mainly imported from Singapore. Its daily import of refined crude oil equals 400,000 barrels.

Iran and Indonesia have also agreed to build a 360,000 BBL/d liquefied petroleum gas plant in southern Iran's Bandar Abbas on the north side of Strait Hormuz, as well as a 1 million ton per annum urea plant in southern Iran.

It was reported that construction on the $4 billion Kuwait-Indonesia joint venture, the Hemoco Selayar International oil refinery on Selayar Island in Indonesia's South Sulawesi Province, is scheduled to be complete this year. The refinery was designed to be Asia's most technologically advanced refining facility. The first plant at the refinery is designed to process 225,000 BBL/d of crude oil, which will come from Kuwait. The plant's refined oil will be exported to Japan, Korea and the U.S.

As the only member of the Organization of the Petroleum Exporting Countries in the Asia-Pacific region, Indonesia has nine refineries in the country, providing 1 million BBL/d.

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