PT Pertamina and Eni end partnership to build green diesel refinery in Indonesia

Indonesian state energy company PT Pertamina has ended a year-long partnership with Italian oil and gas firm Eni SpA to build a ‘green diesel’ refinery in Indonesia processing palm oil, Reuters reports.

Pertamina chief executive Nicke Widyawati told a parliamentary committee on 29 January that Eni required internationally recognised certification for palm oil even though the oil would have been processed in Indonesia.

“We have decided to terminate this partnership and replace it with a partnership with UOP from the United States for support in technology,” Widyawati said. Honeywell UOP supplies petroleum refining and gas processing technology, including renewable diesel or hydrotreated vegetable oil (HVO) technology.

Eni’s 750,000 tonnes/year Gela biorefinery in Italy, for example, utilises technology licensed from Honeywell UOP to produce HVO, using hydrogen to deoxygenate a feedstock, with a second stage isomerisation step.

Pertamina and Eni’s joint venture was signed in January 2019.

The new “green diesel” refinery in Plaju, South Sumatra province has a planned capacity of 1M tonnes/year, with a target date of 2024 commencing operations, Reuters said.

The EU announced last year that it was phasing out palm oil-based biofuels due to deforestation concerns. Under the EU Delegated Regulation Act, palm oil has been classified as a high-risk indirect land use change (ILUC) biofuel feedstock, the use of which will be capped at 2019 levels until 2023, and phased out to zero by 2030.

Indonesia is the world’s top palm oil producer and is working to increase domestic use of palm oil-based biodiesel in order decrease dependence on international markets, reduce diesel fuel imports and maintain palm oil prices.