Pertamina Scales Back Its Refining Ambitions

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Pertamina has scaled back multibillion-dollar plans to double its refining capacity, citing a forecast that Indonesia's consumption of petroleum fuels will decline as a result of the energy transition. • The company is now targeting an expansion of refining capacity to 1.4 million barrels per day by 2025 from 1 million b/d today. • The original plans called for an expansion of capacity to 2 million b/d, with construction of two new plants and upgrades of five of the national oil company's six existing refineries. • But there have been many setbacks and years of delay. • Under the revised plan only one new refinery will be built. Demand Set to Shrink Pertamina expects Indonesia's demand for fuel -- excluding biofuels -- to peak at 1.5 million b/d in 2040 and then decline to 1.4 million b/d in 2050, under its "market-driven" scenario. Under its "green transition" scenario, fuel demand is projected to fall to 600,000 b/d in 2050. In contrast, Pertamina calculates that fuel demand would grow to 2.4 million b/d in 2050 under a "business-as-usual" scenario. But it regards this scenario as the least likely to play out. If biofuels are added to the forecasts, demand in 2050 would reach 1.7 million b/d (market-driven), 1.2 million b/d (green transition), or 2.7 million b/d (business-as-usual). International Partners Withdraw

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