Pertamina Joins Fortune Global 500 List, Pertamina International Refinery Boosts Contribution
Jakarta, August 10, 2023 – With Pertamina's inclusion in the Fortune Global 500 List, PT Pertamina International Refinery (PIR) as a Pertamina sub-holding for refining and petrochemical businesses continues to enhance its best efforts in conducting refining and petrochemical operations. Throughout the first half of 2023, PIR has successfully recorded positive operational performance to support the company's business development in strengthening national energy resilience.
PIR's task is to carry out national strategic project execution. Regarding the refinery projects development within the Refining & Petrochemical Subholding scope, besides completing two projects (onstream) in 2022, namely Green Refinery Cilacap Phase 1 and RDMP Balongan, the ongoing project is RDMP Balikpapan. As of June 2023, the RDMP Balikpapan physical progress has reached 76.70% compared to the 75.94% forecast plan (0.76% ahead). Once completed, the Balikpapan Refinery, following RDMP, will increase its processing capacity by 100 thousand barrels per day (Bpd), from the initial 260 Bpd to 360 Bpd, and will also produce 225 thousand tons of petrochemical products per year. The Balikpapan Refinery development will contribute to national energy resilience.
In conducting business operations, PIR is committed to continuous positive contributions. Several factors have driven the positive performance in the 2023 first half, including refinery optimization achievements and operational cost efficiency. According to the President Director of PIR, Taufik Aditiyawarman, refinery optimization is achieved by producing high-value products in line with crack spread movements (the difference between crude oil prices as raw material and the prices of products by the refinery).
"Refinery optimization also extends to the crude procurement process. We have the flexibility to manage the nation's crude resources to enhance refinery profitability," Taufik explained.
Pertamina International Refinery also undertakes various efforts to produce high-value products from refinery inputs, aiming to increase the Yield Valuable figure. One of the products still being promoted is Marine Fuel Oil Low Sulfur (MFO LS - for ship bunkers). According to Taufik, this contributes to exceeding the product yield target. During the first half of 2023, the percentage of high-value product production, or Yield Valuable Product, reached 83.1% actualization compared to the June 2023 RKAP target of 82.3%.
To enhance refinery performance, PIR carried out several efforts for maintenance and rejuvenation. During the first half of the year, several refineries underwent Turn Around and Pitstop activities, including the Cilacap Refinery and TPPI Refinery. After the Turn Around (TA), the Cilacap Refinery enhanced its capability to process more sour crude oil, increasing the Total Acid Number (TAN) from 0.30 to 0.46. It follows the company's strategic plan to broaden crude oil processing range for more cost-effective raw materials. TPPI's equipment rejuvenation process also increased the platformer refinery's processing capacity from 37 thousand Bpd to 50 thousand Bpd.
Pertamina's refinery reliability is depicted in the Plant Availability Factor (PAF) indicator. "Furthermore, the Plant Availability Factor (PAF), which measures the refinery's operational reliability against planned operations, has been improved to 99.8% from the June 2023 RKAP target of 99.2%," Taufik stated. The PAF value is maintained consistently above 99% through routine and non-routine maintenance (turnarounds), refinery digitization, and the Asset Integrity Management System (AIMS) implementation.
Throughout the first half of 2023, Pertamina International Refinery processed 170 million barrels of raw materials, including crude, intermediates (naphtha and HOMC), and gas. PIR also contributes significantly to Gasoil and Avtur production, making Pertamina the provider of these products on a national level.
In energy usage, the Energy Intensity Index (EII) for refinery production until June 2023 stood at 107.9, surpassing the RKAP target of nearly 108.4. A lower EII value indicates better performance. Initiatives to reduce EII include utilizing external electricity and gas and equipment rejuvenation.
Taufik added that this year, PIR reaffirms its commitment to achieving Net Zero emissions and implementing Environmental, Social, and Governance (ESG) aspects by encouraging all Refinery Units and Subsidiaries to transition toward Green Refinery practices. One of the efforts involves substituting Gas Oil usage in power generation units with Compressed Natural Gas (CNG), which is more environmentally friendly due to lower CO2 emissions, at the TPPI Tuban Refinery. "The use of CNG at the TPPI Refinery, replacing Gas Oil in all power generation units, is a transitional energy program aimed at energy efficiency and renewable energy use, ultimately enhancing refinery operational reliability," Taufik explained.
Besides promoting cleaner and environmentally friendly energy usage, CNG adoption is also economically advantageous. With CNG usage, the TPPI Refinery operates more reliably, efficiently, and cost-effectively, as the decreased Gas Oil consumption reduces production costs, thereby turning the previously used Gas Oil for power generation into an additional revenue stream for TPPI.
Furthermore, as a testament to its commitment to petrochemical business development, PIR, through PT Trans-Pacific Petrochemical Indotama (TPPI), distributes Orthoxylene products produced by the TPPI Refinery in Tuban, East Java, with an annual production capacity of 50,000 tons. Following the governmental directives, particularly from the Ministry of Industry, to focus on developing a petrochemical product portfolio, including supplying essential raw materials like Orthoxylene.
Pertamina plays a crucial role in downstream petrochemical industry development domestically, supported by its robust oil refining capacities. Additionally, as a central figure in petrochemical raw material production, Pertamina has the potential to be a national economic locomotive, significantly impacting Indonesia's economy. Hence, Taufik emphasized that adaptive strategies are crucial to compete effectively against current business challenges and become a global player. "This includes the ability to produce various valuable products like Orthoxylene, Smooth Fluid, Brizone, BTX, Propylene, and more," Taufik clarified.
The Vice President of Corporate Communication at PT Pertamina (Persero) explained that PIR has become a profitable business entity. Through this performance, PIR contributes to Pertamina's revenue and profits, resulting in an 82-step increase in its position in the Global Fortune 500 rankings.
"Post-restructuring, Pertamina's refinery business orientation has shifted from being a cost center to becoming a profit center," Fadjar stated.
PT Pertamina International Refinery is a PT Pertamina (Persero) subsidiary engaged in oil processing and petrochemical businesses following ESG (Environment, Social & Governance) principles. PIR is also registered under the United Nations Global Compact (UNGC) and committed to the UNGC's Ten Universal Principles in its operational strategy as part of ESG implementation. PIR will continue to conduct its business professionally, striving to realize its vision of becoming a world-class Oil Refining and Petrochemical Company with environmental awareness, social responsibility, and good corporate governance.**