PRPP News Highlight
Published: 23 - 9 - 2021

Fulfilling Power of National Strategy Project, Pertamina Rosneft Cooperates with PLN

Fulfilling Power of National Strategy Project, Pertamina Rosneft Cooperates with PLN

Denpasar, September 23rd, 2021 – In line with the Nawacita from President of Republic Indonesia to Realize Economic Independence by Driving Strategic Sectors of the Domestic Economy, and in accordance with the national energy grand strategy in the future, Pertamina is currently running a series of mega-scale Refinery and Petrochemical Projects.

Through this series of projects, Pertamina is expected to be able reduce Indonesia's dependence on imports of fuel products, by increasing refinery capacity in order to optimize fuel products and improve the quality of fuel and Naptha, as well as to advance the Indonesian economy by expanding its business massively to petrochemical industry which is currently still very dependent on imports for its fulfillment.

GRR Tuban is one of the mega projects currently of concern to Pertamina. The construction of the Oil Refinery, which is integrated with the Petrochemical Complex with a crude oil processing capacity of 300 thousand barrels per day, will produce fuel of 230 thousand barrels per day in total, and petrochemical and aromatic products of 4.1 million tons per year.

In the midst of efforts to accelerate the progress of the construction of the Tuban grass root refinery, Pertamina through its subsidiary Refining & Petrochemical subholding, PT Kilang Pertamina Internasional is also trying to ensure the availability of facilities and infrastructure to support the operation of the GRR Tuban refinery which is planned to start operating in 2027 under the management of Pertamina Rosneft.

To ensure the provision of electricity, cooperation between SOE's is needed to support the operation of GRR Tuban in the future. The synergy of SOEs was stated through the signing of a memorandum of understanding between Pertamina Rosneft and PT PLN (Persero) regarding a joint study plan in providing electricity for the needs of the Tuban GRR project which was signed directly by Pertamina Rosneft President Director Kadek Ambara Jaya and Pavel Vagero as Director of Finance and General Affairs with General Manager of PLN Java Distribution Unit Adi Priyanto on Thursday (23/09) witnessed by Deputy Minister I of SOE's,  Pahala Mansyuri.

In his remarks, Pahala said that the provision of electricity for NGRR Tuban will provide benefits for both parties and as a synergy of SOEs this cooperation will provide benefits related to national efficiency. "For PLN, this collaboration will increase the absorption of electricity so that it will increase revenue, while for Pertamina Rosneft this cooperation will make it more focused on increasing its competitiveness", said Pahala.

Through this memorandum of understanding, Pertamina Rosneft and PLN will open up opportunities to carry out joint studies to ensure the provision of electricity supply up to 20 Mega Watts (MW) during the construction and commissioning phases. In addition, from the results of the study, the most optimal and profitable cooperation scheme from the business aspect will be determined and will include determining the provision of supporting infrastructure and system and equipment configuration scenarios.

"The construction phase is targeted to start in the 3rd quarter of 2023 and the estimated electricity demand of GRR Tuban in this phase is 20 megawatts. As for the commissioning stage of the utility start-up which will start in the year in the 2nd quarter of 2026, electricity needs can reach 50 megawatts", said President Director of PT Kilang Pertamina Internasional, Djoko Priyono representing the President Director of Pertamina, Nicke Widyawati.

Furthermore, the current configuration of the Pertamina Rosneft Refinery requires certainty of guaranteeing the operation of the refinery without interruption of electricity so that a reliable electricity supply is needed. "The cessation of refinery operations in 1 day is equivalent to the loss of potential revenue of USD 34 million (equivalent to 480 billion Rupiah) so that a guarantee of reliable continuous electrical energy supply with "zero total failure" is needed", said Djoko.

On this occasion, President Director of PT PLN (Persero) Zulkifli Zaini expressed his appreciation for the trust given to PLN which will maintain its commitment to providing reliable electricity needs at competitive prices.

This Memorandum of Understanding will be valid for 1 (one) year and the results of this joint study will be stated in Cooperation in the provision of electricity GRR Tuban in the format of an Electricity Sale and Purchase Agreement. At the operating stage, total electricity requirement for normal operating conditions reaches 678 megawatts through a combination configuration of self-power generation supply from GRR Tuban and electrical power grid from PLN and it is planned that PLN will supply up to 500 megawatts.

The collaboration between Pertamina Group and PLN itself, especially for fuel refinery operations, is not the first. Previously, PT Pertamina (Persero) signed a cooperation agreement with PLN for the provision of electricity services for 5 Pertamina refineries in Refinery Unit (RU) II Dumai, RU III Plaju- Sungai Gerong, RU IV Cilacap, RU V Balikpapan, and RU VI Balongan with the need for total electricity supplied reaching 217 MVA which can further increase by 104 MVA.

Pertamina Rosneft is a joint venture between Pertamina Group and Russian energy giant Rosneft which is the implementer of the national strategic project GRR Tuban. Standing on an area of 834 hectares, the refinery, which is expected to be the largest petrochemical facility in Southeast Asia, is targeted to be operational by 2027 and absorb approximately 27,000 workers at the time of construction, as well as 2,500 workers after the project is operational. GRR Tuban project is currently in the Front-end Engineering Design stage with progress as of September 17, 2021 has reached 34.54% vs. the plan of 17.83% (ahead +16.71%).

With support from Ministry of SOE's, Ministry of Energy and Mineral Resources and also PLN, the realization and execution of the Tuban GRR project can run smoothly and according to the target, which will lead the Indonesian nation to become an independent nation in fulfilling fuel and fulfilling petrochemical products.

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