Pertamina gets $225m loan for Balongan

Alfian, The Jakarta Post, Jakarta | Fri, 01/09/2009 10:55 AM  

State oil and gas company PT Pertamina has received a US$225 million financing commitment from a foreign bank consortium to build a polypropylene unit at the company's refinery in Balongan, West Java. 

Finance director Ferederick Siahaan said Thursday that among the members of the consortium were HSBC Holdings Plc, BNP Paribas SA and Sumitomo Mitsui Banking Corp. 

"The deal is for project financing. We signed it by the end of last year," said Ferederick, adding that Japan-based Nippon Export and Investment Insurance (NEXI) would act as guarantor for the project. 

Pertamina has shut Balongan oil refinery since last October for maintenance. It mainly produces Premium gasoline with a capacity of 50,000 barrels per day. During the maintenance process, the company is also upgrading the refinery's unit producing propylene to be able to produce polypropylene, used as a raw material for plastic industries. 

The firm earlier has said it planned to spend Rp 19.4 trillion in investment this year. Of the total, Pertamina will allocate Rp 11 trillion for its upstream business, Rp 2.30 trillion for processing, Rp 2.40 trillion for marketing and trading, and Rp 3.7 trillion for investment currently being negotiated by the company and the government. 

Ferederick said the investment would come both from the company's internal budget and loans. 

Pertamina allocated Rp 17 trillion in investment in 2008, but, as of December, only Rp 11 trillion had been spent. 

It booked a total net profit of around Rp 30 trillion (US$2.74 billion) last year, up from Rp 24.5 trillion in 2007. For this year however, Pertamina said profits might fall following a declining trend in crude oil prices.