Tuban Refinery Reoperates

abarrelfullabarrelfull wrote on 12 Nov 2013 16:40
Tags: asia indonesia pertamina refinery

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The Tuban TPPI Refinery has been reoperating since 1 November 2013, after stopped it stopped its operation around two years ago. The refinery's readiness had reached 100% so the Tuban TPPI Refinery started reoperating and “oil in” was conducted on 4 November 2013. The reoperation of the Tuban TPPI Refinery is part of Tolling Agreement between PT. TPPI and PT. Pertamina (Persero).

After experienced default to its creditors leading to its bankruptcy on 28 September 2012, followed by the involvement of Pertamina to TPPI management on 11 October 2012, TPPI then submitted the application for suspension of debt payment obligation to the Commercial Court. The application then gave rise to the restructuring plan approved by TPPI creditors and approved by the Jakarta Commercial Court on 26 December 2012.

As one of the follow up steps of the settlement plan, on 8 May 2013, TPPI and Pertamina signed the tolling agreement that would be immediately effective for 6 months. The operation of Tuban TPPI Refinery aims to give the opportunity for TPPI to again have income through the tolling fee from the collaboration.

In the reoperation of the Tuban TPPI Refinery, Pertamina provided commitment and full support to ensure its success. After conducting management step-in to TPPI, Pertamina has provided various helps and support, including supplying raw materials in the form of condensate and naphtha, high quality human resources, equipments and other operational supports.

Benefits of Reoperation of TPPI Refinery
The reoperation of the Tuban TPPI Refinery holds very important role for supplying and developing petrochemical industry and fuel in Indonesia. With the reoperation of the Tuban TPPI Refinery, Indonesia will receive additional supply of petrochemical, as well as fuel and LPG supply so that the country can reduce import volume.

Regarding the tolling agreement between TPPI and Pertamina for the 6 months period, the factory will be operating at around 55-80 kbp (kilo-barrel per day) rate and will produce around 530,000 tons of products, comprising Paraxylene, Benzene, Orthoxylene and Heavy Aromatic, fuel additives in the form of Gas Oil/ Diesel Oil and Fuel Oil at the volume of 1.5 million barrels, additional LPG at 36,000 tons, and Light Naphtha at 300,000 tons or 2.8 million barrels.

The Settlement Agreement Implementation
The reoperation is the initial step for implementing the Settlement Agreement as stipulated by the Court. Subsequently, there will be Bond/Notes Issuing and Shares Issuing to conduct Debt Conversion to Shares, which now is in the phase of documentation completion. TPPI plans that it will be realized on RUPSLB that will be conducted in early January 2014.

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