Indonesia's Pertamina has shortlisted five companies, including Japan's Toyo Engineering, Sinopec Corp (0386.HK: Quote) and Italy's Saipem (SPMI.MI: Quote) to build a $1 billion refinery unit on Java, a company official said on Wednesday.
The state oil and gas firm's spokesman Mochamad Harun said South Korea's Hyundai Engineering and another local firm have also been shortlisted to upgrade its Cilacap refinery.
Pertamina had previously reached a preliminary agreement with Japan's Mitsui & Co (8031.T: Quote) to build a residue fluid catalytic cracking unit (RFCC) with a capacity of around 60,000 barrels per day (bpd) to produce gasoline and other products at Cilacap.
In March, Mitsui pulled out from the project because of disputes over majority share holder issues and Pertamina said it will build the RFCC by itself.
"We expect to decide the winner later this year and to sign an engineering contract early next year," Harun said.
"We expect the RFCC will be commissioned by the end of 2013 or early 2014," he said.
Pertamina's Cilacap refinery has two crude distillation units with capacities of 118,000 bpd and 230,000 bpd. The refinery also has a 29,000-bpd gasoline-making reforming unit.
Harun said Pertamina also plans to build a $300 million platforming unit at Cilacap to produce high octane gasoline.
The platforming unit will have a capacity of 50,000 bpd and construction is expected to begin next year.
Harun added that Pertamina is looking at scrapping a planned $3 billion joint venture with Iran and a Malaysian firm to build a 150,000 bpd oil refinery in Java.
In 2008, Pertamina signed a preliminary deal to build a refinery in which it and the National Iranian Oil Refining and Distribution Company would take a 40 percent stake, with 20 percent for a Malaysian partner, Petrofield. [ID:nJAK35566]
"Pertamina will talk with Iran and the Malaysian firm about whether to continue the project or to cancel it. Because the project seems to be not economically viable," Harun said.
The pace of developing both downstream energy projects has been disappointing and often hit by political squabbling, hindering badly needed foreign involvement and technology.
Indonesia, Asia's biggest gasoline importer, has nine oil refineries with a total combined capacity of around 1 million barrels per day (bpd), but about 30 percent of the country's oil product consumption is still imported.
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