Pertamina to Take Over Belanak LPG Refinery from ConocoPhillips

The state-owned oil and gas giant Pertamina is to take over the liquefied petroleum gas (LPG) refinery in the Belanak Field, South Natuna B Block, from ConocoPhillips after the American multinational energy corporation declared its plan to stop producing LPG by the end of this year. If Pertamina does not take over production, the government will have to import even more gas to cover the shortfall. 

Pertamina’s marketing director Ahmad Bambang said his team is currently reviewing the possibility of taking over the refinery. Although ConocoPhillips says that operating the facility is no longer viable, things could be different in Pertamina’s hands.

Ahmad also expressed his concern regarding the withdrawal of ConocoPhillips, because of the resulting disruption in the supply of LPG to Pertamina. The Belanak refinery has the capacity to produce 10,000 metric tons of LPG, and if production stopped, Pertamina’s domestic gas reserves would decrease significantly.

Currently, Pertamina imports almost 60 percent of the LPG that Indonesia uses, according to Pertamina data, demand for gas will increase to 7.8 million tons this year, of which 6.6 million tons will be subsidised by the government.

Pertamina is also looking at developing LPG infrastructure to maintain the nation’s energy security. Four major projects are currently underway to build LPG terminals in Indonesia, using state funding. With a total capacity of 6,000 metric tons, this development project requires investment of IDR 870 billion. 

The government will develop gas infrastructure across the nation, focusing on the eastern part of Indonesia. Wianda Pusponegoro, Pertamina’s vice-president of corporate communication, is hoping that nothing will disrupt the development, especially in the eastern part of the vast archipelago.