JAKARTA, Dec 22 (Reuters) – Indonesian state energy firm Pertamina aims to finish a $5 billion upgrade to the Cilacap oil refinery in Central Java in 2021, one year earlier than its previous target, its chief executive said on Thursday.

Pertamina is upgrading the refinery along with partner Saudi Aramco, the state-owned energy company of Saudi Arabia. The expansion will increase the refinery’s crude processing capacity to 400,000 barrels per day (bpd), bigger than the previous plan of 370,000 bpd, Pertamina said.

The refinery’s current capacity is 348,000 bpd.

“Initially the target was to complete it in 2022. But based on our latest meeting, the Aramco CEO challenged our team to complete it in 2021,” Pertamina CEO Dwi Soetjipto told reporters after signing an agreement on the Cilacap refinery master plan with his Saudi Aramco counterpart Amin Nasser.

The refinery will produce 80,000 bpd of gasoline, 60,000 bpd of diesel and 40,000 bpd of jet fuel after the upgrade, Soetjipto said, adding that the fuel will be sold domestically as well as exported.

The Southeast Asian company has previously said the Cilacap project will include a new hydrocracker unit, which breaks down residual fuels produced during initial oil refining into more valuable diesel fuel and gasoline. The project will also add units to increase the production of the petrochemicals paraxylene and polypropylene.

Pertamina will take 55 percent of the refinery joint venture, with Aramco controlling 45 percent.

Pertamina’s director Rachmad Hardadi said Aramco will have the right to supply Saudi Arab Light crude equal to up to 70 percent of the refinery’s capacity after the upgrade.

Aramco chief executive Nasser said the company is still interested in working with Pertamina to upgrade two more refineries in Balongan and Dumai.

“We’re definitely interested to expand both (Dumai and Balongan) and the completion of basic engineering design of Cilacap in 2017. We are looking at the opportunity for integration of the three refineries,” Nasser said.

Soetjipto, however, said the heads of agreement on Dumai and Balongan upgrades that Pertamina signed with Aramco last year had expired. He said Pertamina might look for a new partner and Aramco is one of the choices.

Pertamina at present operates seven refineries in Indonesia and is working to upgrade four.

The Indonesian government has revised several rules for refinery investment, trying to restore investor confidence and overhaul its energy infrastructure. The last time a new refinery was completed was in 1997.

(Reporting by Wilda Asmarini; Writing by Eveline Danubrata and Gayatri Suroyo; Editing by Christian Schmollinger)

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