Indonesia's Strategic Push for Energy Independence Through Refinery Modernization

Accelerating National Energy Resilience

Indonesia is embarking on an ambitious journey to enhance its energy independence through comprehensive modernization of its oil refineries. The government has announced plans to develop new refinery capacity of approximately 1 million barrels across various strategic locations including Kalimantan, Java, Sulawesi, and Maluku-Papua ¹

. This massive infrastructure development is designed not only to strengthen energy security but also to promote regional economic development through job creation and industrial growth.

Key Players and Projects

State-owned enterprises are at the forefront of this energy transformation. PT Rekayasa Industri (Rekind), a leading Engineering, Procurement, and Construction (EPC) company, has been instrumental in various national energy projects. The company successfully executed the Refinery Development Master Plan (RDMP) Balongan Phase 1, increasing production capacity from 125,000 to 150,000 barrels per day ahead of schedule. This achievement demonstrates Rekind's technical capabilities and commitment to Indonesia's energy security.

Addressing Energy Deficit

The modernization drive is a response to Indonesia's significant energy deficit. Current refinery capacity stands at 1.167 million barrels per day, while national demand reaches 1.359 million barrels per day, resulting in a substantial 640,000 barrels per day deficit that must be met through imports. By enhancing existing facilities and developing new refining capacity, the government aims to bridge this gap and achieve greater energy self-sufficiency.

Technological Advancements and Future Plans

The modernization efforts include technological upgrades to meet Euro V emission standards and enable processing of diverse crude oil types. Additionally, Indonesia is exploring downstream opportunities such as Dimethyl Ether (DME) production from coal, with Sumatra and Kalimantan targeted as DME production hubs. This diversification strategy is expected to reduce reliance on LPG imports and create new industrial opportunities.

Collaborative Approach

The success of this ambitious program relies on strong collaboration between government entities, state-owned enterprises like Pertamina, and specialized EPC providers like Rekind. This coordinated effort combines regulatory support, industrial expertise, and technological innovation to achieve national energy objectives. As Indonesia progresses with its refinery modernization program, the country is poised to make significant strides toward achieving energy independence while fostering sustainable industrial growth.