Balikpapan. Indonesia’s largest oil refinery project in Balikpapan, East Kalimantan -- a $7.4 billion investment -- is targeted to be completed and fully operational by mid-December 2025, a senior official said on Wednesday. Once in operation, the refinery is expected to supply 22 to 25 percent of Indonesia’s national fuel demand.

“We conducted inspections this morning through this afternoon on the Balikpapan refinery facilities, including production units and supporting facilities such as oil-storage infrastructure that will add 2 million kiloliters of capacity. This is the largest refinery we have,” Deputy Energy and Mineral Resources Minister Yuliot Tanjung said in a press statement after visiting the project.

Yuliot said the visit was aimed at reviewing the remaining work before full operation. The refinery is planned to be inaugurated by President Prabowo Subianto in December.

“We came today to check production readiness. The inauguration by the President will be proposed based on actual readiness in the field,” he said.

According to Yuliot, only minor final touches remain. “There are still refinements of around 1 to 2 percent, which we expect can be completed within the next few days. The remaining 1.5 percent consists only of detailed work,” he said.

The Balikpapan Refinery, managed by Kilang Pertamina Internasional, is classified as a National Strategic Project and represents one of the largest investments by a state-owned company as part of a long-term strategy to reduce dependence on imported fuel.

Kilang Pertamina President Director Taufik Aditiyawarman said several key milestones have been reached, including the initial operation of the Residual Fluid Catalytic Cracking (RFCC) unit on November 10.

The RFCC is the refinery’s core unit designed to produce Euro V-standard fuel, enhancing both efficiency and economic value. 

Euro V is an international fuel-emission standard that significantly reduces harmful exhaust pollutants. Globally, Euro V fuel is typically slightly more expensive to produce due to additional refining processes. However, long-term benefits -- including reduced engine maintenance and improved fuel efficiency -- can offset higher prices.

“RFCC not only increases efficiency and product quality, but also boosts the added value of our domestic natural resources,” Taufik said.

Once fully operational, the Balikpapan refinery will not only supply environmentally friendly fuel but also process remaining residues into high-value petrochemical products, including propylene and ethylene.

Both products are critical feedstocks for Indonesia’s petrochemical industry, which has long faced shortages and has relied heavily on imports.

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