Jakarta-based Pertamina Lubricants, a subsidiary of the Indonesian energy company PT Pertamina, is planning to invest a total of 1.3 trillion Rupiah (US$113.5 million) to build a grease plant, worth 500 billion Rupiah, and a lube-oil blending plant, worth 800 billion Rupiah

Construction of the new grease plant is planned to start in June 2015 while the lube-oil blending plant, also in Tanjung Priok, is currently under construction, which is expected to be completed in December this year, Supriyanto DH, Pertamina Lubricant president director, said. The capacity of the grease plant in Tanjung Priok, in North Jakarta, will reach 8,000 metric tons per year.

“We will have one of the highest capacities in the region. When the construction ends, our capacity will reach almost 600,000 tons per year,” Hanung Budya Yuktyanta, Pertamina’s marketing and trade director said. He added that Pertamina is also in the process of acquiring a production facility in Thailand, which will be the company’s base of production in the Indo-China region according to Hanung. “We also plan to be aggressive in marketing to China and partner with a lubricant company there,” he added.

“There is still potential in the domestic and overseas market. For Indonesia, the market is worth around Rp 20 trillion. Currently, we dominate the domestic lubricant market by about 60 percent to 62 percent, while our biggest competitor only controls about 10 percent,” he said.

Pertamina currently operates two lube-oil blending plants, one in Cilacap, Central Java, and one in Surabaya, East Java.

Pertamina also operates a lube base oil refinery in Cilacap with an API Group I base oil capacity of 8,600 bpd, and also has partial ownership in PT Patra SK, a joint venture between PT Pertamina Patra Niaga and SK Energy, which operates a lube base oil plant, referred to as the SK-Pertamina LBOP, in Dumai, Sumatra, Indonesia with a capacity to produce 10,000 bpd of Group III lube base oil. SK owns 65 percent and Pertamina owns 35 percent

PT Pertamina, SK Lubricants Co., and PT Patra SK presently are conducting a feasibility study in order to increase production and marketing capability of the Cilacap lube base oil refinery, to potentially increase the production capacity and to produce API Group II base oils.

In 2013, Pertamina reported revenue of IDR (Rupiah) 12 trillion, with net income of IDR 2.4 trillion.