OREANDA-NEWS.  June 26, 2012. PT Pertamina (Persero) affirms that the plan to build joint-refineries with investors, be it  Kuwait Petroleum Corporation or Saudi Aramco Asia Company Limited, will be conducted on Pertamina's own land that require no new land acquisition, reported the press-centre of Pertamina.

The affirmation was conveyed by Vice President Corporate Communication of Pertamina Mochamad Harun in response to the increasingly widespread land speculation practice that has been unsettling and disturbing the public.

According to Harun, the speculation of land price has driven irrational increase of land price in Tuban and Balongan by many orders of magnitude.

"We want to convey clear message to the community and also to the speculators that Pertamina has no plan to acquire any land for the construction of refineries. We will carry out the refinery construction projects on land currently managed by Pertamina," Harun said.

Based on information gathered, the land prices at area speculated to be used for refinery construction location rose from Rp 65,000 per meter square to Rp 3.6 million per meter square.

"We also assure that the construction of the two new mill need not to be in East Java or West Java as previously planned, and the land to be used will be Pertamina's own land," he said.

Pertamina has huge interest in realizing the project plan for the two refineries with individual capacity of 300,000 barrel per day. To realize that, Pertamina has worked with Kuwait Petroleum Corporation and Saudi Aramco Asia Company Limited.

The construction of the two refineries is now still in the process of discussing fiscal and non-fiscal incentives with the government.

"The construction of the two refineries is carried out to enhance national energy security and reduce Indonesia's dependence on fuel imports. As such, we are committed to make it happen."

Currently, the fuel production capacity from Pertamina-operated refineries has reached 40.6 million KL per year, with estimated 2012 fuel consumption of reaching 57.1 million KL. In 2018, the demand for national fuel is projected to reach 72.2 million KL, giving the necessity to add new refineries to prevent Indonesia from high dependency on imported fuels.

"We've conceived a roadmap for new refinery construction and revamping of existing refineries. We expect that, in 2018 the fuel production from Pertamina's and partners' refineries will increase to 66.7 million KL so that imports could be reduced," he said.