Iranian oil company Nakhle Barani Pardis (NBP) have announced plans to set up a 300,000 barrel per day refinery in Indonesia.
Iran is keen to promote stronger international ties following the easing of sanctions by western powers. The refinery will cost an estimated $3 billion and NBP are willing to invest up to 30% of the cost.
NBP signed a Memorandum of Understanding (MoU) with Indonesian firm PT Kreasindo Resources to explore the possibility of building the refinery.
In the last 10 years, no projects have moved beyond the planning stage. However, with Indonesia desperate to cut down its dependency on foreign oil, this agreement could well bear fruit.
Indonesia’s current refining capacity stands at around 1 million barrels per day – enough to satisfy two thirds of its demand. The country currently imports a further 500,000 barrels per day to bridge the gap in domestic supply.
Over the last decade, trade between Iran and Indonesia has seen a 500% increase, rising to $1.26 billion in 2012.
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