Funding Secured, Pertamina Balikpapan Refinery RDMP Becomes an Environmentally Friendly Modern Refinery

Jakarta, June 24, 2023 - PT Pertamina (Persero) confirms that the national strategic project (PSN) Refinery Development Master Plan (RDMP) Balikpapan aligned with Indonesia's energy transition roadmap. The Balikpapan RDMP project will become an environmentally friendly refinery as it can significantly reduce emissions through energy efficiency in operations and the production of future products, thereby supporting the government's net-zero emission program.

As one of the largest investment project, the Balikpapan RDMP brings a multiplier effect for regional economic growth by involving local companies, creating local job opportunities, and targeting a Domestic Component Level (TKDN) of 30-35%.

Upon completion of the project, it is projected to save the current account by USD 2.5 billion per year from petroleum products, LPG, and petrochemicals.

Pertamina, through its Sub Holding Refining & Petrochemical PT Kilang Pertamina Internasional (KPI), held the Closing Ceremony for Project Financing of the Balikpapan RDMP on Friday, June 23, 2023. The project's development funding has gained trust and support from 4 Export Credit Agencies and 22 commercial creditors, with total value of USD 3.1 billion to be disbursed to PT Kilang Pertamina Balikpapan (KPB).

Deputy Minister of State-Owned Enterprises 1, Pahala Nugraha Mansury, stated that the energy sector is crucial for economic development as no activities can occur without energy support.

"The successful financing of the Balikpapan RDMP Project is undoubtedly an achievement for Pertamina, KPI, and KPB. It is currently the largest project financing in Indonesia, and even the commitments from the creditors have experienced an over-subscription of up to 42 percent," said Pahala.

Pahala added that this achievement proves that Pertamina is considered a trusted global energy company and demonstrates the project's magnitude and strategic importance.

"That is why we believe in Pertamina's ability to complete the Balikpapan RDMP project. It would increase production from 260,000 barrels per day to 360,000 barrels. This is very important for us and for Indonesia," said Pahala.

On the same occasion, President Director of PT Pertamina (Persero), Nicke Widyawati, revealed that the Balikpapan RDMP Project will become a modern and environmentally friendly refinery by reducing carbon emissions through operational energy efficiency and its products.

"The Balikpapan Refinery will be able to process almost all types of crude oil, with advanced processing capabilities, enabling us to search for crude oil more efficiently and at a lower cost, even those with high sulfur content. The quality of the products will improve from Euro 2 to Euro 5," said Nicke.

According to Nicke, Pertamina's efforts to complete the Balikpapan RDMP were not hindered by the Covid-19 pandemic that has been ongoing since 2020. The construction of the refinery has been in progress and currently stands at a progress rate of 74%, with a strong emphasis on maintaining safety and security measures.

Nicke added that the construction of the Balikpapan refinery posed a high level of difficulty as it is being carried out alongside the existing operational refinery. "It is like building a new carriage while the same train is running fast, then we have to merge the new carriage with the existing ones. That is the challenge, and we can accomplish it," said Nicke.

Another challenge is the use of large and heavy equipment, such as the Residue Fluid Catalytic Cracking (RFCC) Disengager/Stripper and Regenerator, with a total weight of approximately 3,100 tons, installed using a Giant Rigger Crane, a specialized crane imported from Belgium. These equipment have a multistage regeneration system, the latest method used in RFCC units to process residue (bottom product) into high-value and environmentally friendly petroleum products, thus improving the refinery's economic/margin performance.

"There is no other project in the world which operates alongside an existing refinery like this. We continue to operate the refinery to maintain energy resilience and ensure an adequate supply of petroleum products, so that we don't have to rely on imports," said Nicke during the Closing Ceremony of the Balikpapan RDMP Project Financing.

Nicke hopes that after the completion of this project, the Balikpapan Refinery will become a modern refinery that Indonesia possesses, capable of producing high-quality and environmentally friendly products, thereby realizing the national energy transition roadmap.

Present at the Closing Ceremony of the Balikpapan RDMP Project Financing were Deputy Minister of State-Owned Enterprises I, Pahala N. Mansury, President Director of Pertamina, Nicke Widyawati, Director of Finance of Pertamina, Emma Sri Martini, President Director of PT Kilang Pertamina Internasional, Isnanto Nugroho S, President Director of PT Kilang Pertamina Balikpapan, Feri Yani, Director of K-Sure, Park Sig-Weon, Vice President & Head of Project Finance Group from K-EXIM, Kim Hyung Jun, Head of APAC SACE, Marco Ferioli, along with 22 representatives from commercial banks.

Also in attendance were the Ambassador of the United States, Sung Y Kim, and the Ambassador of Italy, Benedetto Latteri, who witnessed the Closing Ceremony of the Project Financing.

Pertamina, as a leading company in the energy transition, is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly impact the Sustainable Development Goals (SDGs) achievement. All these efforts align with Environmental, Social & Governance (ESG) implementation across all Pertamina's business lines and operations.**

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