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Pertamina expects to resume TPPI refinery operation at end September

TPPI refinery
TPPI refinery

JAKARTA ( – The effort to revive the operation of petrochemical producer PT Trans Pacific Petrochemicial Indotama (TPPI) is now becoming clearer after the government instructed the State owned energy company PT Pertamina to take over the operation of the TPPI refinery facilities.

PT Pertamina now expects the refinery of TPPI to resume operation from end September this year, so it can start producing certain gasoline in early October to meet domestic market.

Pertamina made the comment after State Enterprise Minister Rini Soemarno and Pertamina President Dwi Soetjipto as well as Pertamina Director for Processing Rachmad Hardadi visited the TPPI refinery on Friday.

Vice President Corporate Communication Pertamina Wianda Pusponegoro said the refinery of TPPI is being directed to become gasoline mode to produce fuels, replacing fuels that are still being imported.

TPPI is to resume operation after the government, through Vice President Jusuf Kalla ordered State Enterprise Ministry and Pertamina, to take over the operation of TPPI.

Pertamina expects TPPI to produce 20,000 barrels of fuel in initial stage and will gradually increase to 50,000-55,000 barrels of gasoline per day.

TPPI has for sometime stopped operation due to huge debts and complicated problems.

The government through state asset management company PT Perusahaan Pengelola Aset (PPA) acquired TPPI in March 2013 after its parent firm PT Tuban Petrochemical Industries (Tuban Petro), which holds 59.5 percent shares in TPPI, failed to settle its debts worth Rp2.83 trillion to PPA.

Tuban Petro owns three petrochemical subsidiaries, namely PT PPI, PT Polytama Propindo and PT Pero Oxo Nusantara.

TPPI has debts to 362 creditors worth a total of US$1.8 billion or around Rp17.88 trillion. It has unpaid debts, including Rp4.14 trillion to Pertamina, JGC Corporation Rp2 trillion, SKK Migas Rp1.348 trillion, UOB Rp932 billion, Polytama International Finance BV Rp372 billion.

TPPI refineries began commercial operation in 2006. However, it halted operation in December 2011 due to huge debts.

At present, Tuban Petro holds 59.5 percent shares of TPPI, Pertamina 15 percent, Sojitz Corporation 4.25 percent and Itochu Corporatino 0.85 percent.

Recently, Director of Tuban Petrochemical Riki Ibrahim proposed the government to set up a task force to realize acquisition of TPPI by Pertamina.  He hopes that the acquisition will ensure allocation of condensate needed by the company.

On June 24, 2015, President Joko Widodo has asked the State Enterprise Minister Rini Soemarno and Pertamina to consider resuming the operation of TPPI to help secure domestic fuel needs.

Currently, the national police is investigating corrupt case involving government certain officials and TPPI executives. VP Jusuf Kalla has said the investigation should not make company executives to be afraid of making decision.

Separately, Minister Rini Soemarno said Indonesia could cut fuel import by 18 percent if TPPI resumes its operation. She hopes TPPI can restart production to meet growing domestic fuel needs and at the same time cut fuel imports.

Rini said Pertamina currently holds 26 percent of TPPI shares. The government aims to raise its stake in TPPI to 56 percent and later on to 70 percent. (*)


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