(EnergyAsia, February 21 2012, Tuesday) — Saudi Aramco Asia Company Limited (SAAC), a subsidiary of Saudi Aramco, said it and Indonesia’s state-owned PT Pertamina have signed a memorandum of understanding (MOU) to jointly evaluate the economic feasibility to build an integrated oil refining and petrochemical project in Tuban in Indonesia’s East Java province.

The proposed complex will process 300,000 b/d of crude oil, the bulk of it supplied by Saudi Aramco on a long-term basis, into high-quality refined petroleum and petrochemicals products to meet rising demand in Indonesia and the rest of southeast Asia.

The partners have set up a joint project team to undertake market research, configuration studies and economic analysis.

The Saudi firm said the project represents an opportunity for it to partner with Pertamina to invest in Indonesia’s growing economy and downstream industry.

“This MOU is a significant first step in extending our already strong relationship with Pertamina, and is also part of Saudi Aramco’s strategy to enhance its global downstream presence,” said Dawood M. Dawood, Aramco’s Vice President for Marketing, Supply and Joint Venture Coordination.

M. Afdal Bahaudin, Pertamina’s Director for Investment Planning and Risk Management, said:

“This cooperation in investment with Saudi Aramco is of the highest value for both Pertamina and Indonesia to strengthen the fuel and petrochemical supply, to satisfy the huge domestic demand now and for the future.

“Pertamina fully supports our partner to make a successful project that is beneficial to both parties and that further strengthens our cooperation with Saudi Aramco. The Tuban refinery and petrochemicals project is part of Pertamina’s plan to improve Indonesia’s energy security.”