CPC Taiwan petrol corp. to begin refining petrol in Indonesia

Taiwanese state petrol company, CPC Corporation Taiwan, will be partnering with the Indonesian petrol corporation, Pertamina

CPC gas station, Fulin Taiwan (By Wikimedia Commons)

TAIPEI (Taiwan News) – It was reported on Dec. 5, that the Taiwanese state petrol corporation, CPC Corporation Taiwan, has decided that it will be partnering with the Indonesian petrol corporation, Pertamina, to begin a new joint refinery operation in Indonesia.

There was some deliberation over previous weeks whether the large petrol corporation would choose Indonesia's Pertamina or India's Adani Group as its partner moving forward.

The decision to cooperate with the Indonesian company was met with enthusiasm by officials in Jakarta. Although the site for the future refinery not yet been determined, it will likely be either in the Regency of Situbondo in East Java, in Lampung Province, or possibly Kalimantan.

Assessments will be carried out over the coming weeks, and a decision is expected by the end of January, according to a report from CNA.

A former consultant of Pertamina, Bayu Kristano, said that currently Indonesia cannot refine enough oil to meet its own demands and must rely on imports to do so. The industry is hopeful that with Taiwanese expertise and cooperation, that Indonesia will be able to boost its own petrol output quickly in the coming years.

The package plant transfer proposed will transfer the machinery and some personnel to Indonesia, in order to boost the nation's overall production of refined gasoline.

Kristano said that in terms of energy security, the continued flow and availability of gasoline to the country must be maintained to meet the nation’s needs. The CPC Corporation Taiwan and Pertamina are both confident the new partnership will benefit both countries moving forward.

Indonesia's government only recently relaxed a strictly regulated petrol market to allow foreign investors to sell petroleum products directly on the market and compete with state enterprises.

Competing with other foreign suppliers, including the Dutch company Vivo Energy who is preparing to expand their retail gas stations outside of the Java, there is bound to be strict competition moving forward.

Therefore, price competitiveness on the petrol market will be paramount to the success of the package plant transfer planned by CPC Corporation Taiwan.