Jakarta (ANTARA News) - The Indonesian government has dropped the plan to fully finance the construction of all refineries worth US$9 billion after considering state budget priorities.

Director General of Oil and Gas at the Energy and Mineral Resources Ministry Edy Hermantoro informed the press, here on Thursday that the government will only finance a part of the mega projects.

"We are seeking the best option," he stated.

Edy explained that the government will finance the initial phase of the mega projects.

The government has begun allocating around Rp300 billion for the construction of refineries in the 2014 state budget.

"We will also scout for locations for the refineries," he pointed out.

The Energy and Mineral Resources Ministry will conduct market consultations with the Finance Ministry in February 2014, he added.

"Through the market consultation, we will determine the availability of land (as locations for the refineries), among others," he stated.

In addition, the government will also look into the configuration of products, both fuel oils and petrochemicals, to give adequate gains to investors, he noted.

Edy stated that the government will find investors who may be really interested in the projects.

He believed that there will be many investors interested in the mega projects once their locations are disclosed.

He added that the government is currently focusing on developing one of three planned refineries.

Earlier, Director for Downstream Oil and Gas Business Development at the Energy and Mineral Resources Ministry Mohammad Hidayat stated that the state budget fund of Rp300 billion will be used to produce basic engineering design for a refinery with a capacity of 300 thousand barrels per day.

The government will soon call for tenders for the development of basic engineering design (BED), he pointed out.

It will take one year to complete the BED, he estimated.

In 2015, the government will continue the phase of detailed design (front and engineering design/FEED) and study probable locations for the refinery, he added.

Hopefully, the FEED can be completed in one year and thereby, work on the construction of the refinery can start by 2016 or early 2017, he confirmed.

The engineering, procurement and construction (EPC) phase is expected to be completed within four years. The refinery will hopefully start operating by 2021.

(Reporting by Kelik Dewanto/Uu.INE/KR-BSR/F001)

Editor: Priyambodo RH

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