Indonesia's new refining capacity

Indonesia recently commissioned two refinery expansion projects of 200 thousand barrels per day (Mb/d) each, and an 85 Mb/d hydrocracker unit. These new facilities modernized and increased the country's existing 400 Mb/d capacity and made it possible for the nation to supply internally its growing domestic demand for refined petroleum products. The average annual growth rate of domestic oil demand since the beginning of Indonesia's first five-year plan in 1969 was, until 1982, more than 12% and was the main reason for the refinery expansion. These facilities, therefore, are not intended to gain a share in the international product market. This paper presents data on domestic supply and demand that show a growing heavy dependency on imports if the additional facilities had not been built. It is not expected that production from the new facilities will change the nation's exports significantly, although some additional exports may take place from time to time because of imbalances between refinery output and domestic demand, the growth rate of which is now down to about 1% per year.