Kuwait Petroleum Corp (KPC) is in talks with Indonesia's Pertamina to build an at least 200,000 barrels-per-day refinery in the Southeast Asian country as it aims to lock in buyers for its future oil supply, KPC's international marketing head said.
A global supply glut following a gusher of shale oil from the United States has redrawn crude trade flows, pushing excess Latin American and West African cargoes to Asia and forcing OPEC members to redraft their strategy to maintain their share of a market that has traditionally been their stronghold.
"At the end of the day we have the strategy for disbursal of our crude. We prefer to go into long-term contracts. When we say long term it is 10 years and above," KPC's Nabil M Bourisly, told Reuters. A stake in the planned refinery will give KPC a stable outlet for its crude for 20-25 years, he added.
Although details on the size and investment for the refinery are yet to be worked out, Bourisly said the plant will at least be of 200,000 barrels-per-day (bpd) capacity in order to be an "economical project".
The talks for a refinery in Indonesia come on the heels of an agreement between KPC and Pertamina to boost co-operation in the energy space. Indonesia, which is set to rejoin the Organisation of the Petroleum Exporting Countries (OPEC) in December after a seven-year break, wants to build complex refineries to meet local fuel demand and cut imports.
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