Hyundai Engineering said on Sept. 16 that it has won a total of $3.97 billion oil refinery projects in Indonesia.
The project was ordered by the Indonesian state-run oil company PT Pertamina. It is a project that will upgrade existing Balikpapan oil refinery. The stake in Hyundai Engineering is $2.17 billion (about 2.6 trillion won).
The plant is located in the East Kalimantan state of Borneo Island, about 1,000 kilometers northeast of the Indonesian capital Jakarta. The plant currently produces 260,000 barrels a day.
Hyundai Engineering will increase the capacity of its existing refinery facilities to 360,000 barrels per day and carry out construction to upgrade them. In particular, the main objective of the project is to enable the production of products that meet the Euro 5 standards, which are environmental regulations.
Hyundai Engineering has won the order through EPC turnkey method that will take charge of both design, purchase and construction. The construction period is 53 months.
Pertamina, which currently handles 90 percent of Indonesia's total oil, will invest $30 billion to expand its crude oil refining capacity from 1 million barrels to 2 million barrels a day by 2026.
As the project is the first of its kind, Hyundai Engineering also has the effect of gaining an advantage in the upcoming order race, a Hyundai Engineering official said.
"With the latest order, Hyundai Engineering has achieved $4 billion in cumulative orders for overseas construction this year. The market diversification strategy has paid off. We will carry out strategic activities with local partners to win additional orders," the official added.