Russia’s oil giant Rosneft and Indonesia’s oil and natural gas corporation Pertamina have agreed to set up a joint venture (JV) for constructing the Tuban oil refinery and petrochemical facility in the eastern part of Indonesia’s Java island, the Russian company said in a statement.

Rosneft’s share in the JV will amount to 45%, and Pertamina will get 55%.

The design capacity of primary processing at the Tuban complex is 15 million tonnes per year. It will run on imported medium and heavy grades of sour crude. The project provides for the construction of a large fuel oil catalytic cracker and a petrochemical complex. The complex is expected to be able to accommodate VLCC supertankers with the deadweight of up to 300,000 tonnes, the company said.

“The creation of the JV marks a new phase of implementing the project to establish a modern oil refinery and petrochemical complex in Indonesia,” the statement said. “The project is a significant element of Rosneft’s strategy aimed at increasing its presence on the market of oil products in the Asia-Pacific region,” it said.

The agreement also defines the key conditions of Rosneft’s hydrocarbon supplies to the JV and the principles of selling the goods produced at the facility.

The Russkoye oil and gas field

Pertamina and Rosneft have signed a memorandum of understanding on cooperation in a project of developing the Russkoye oil and gas field in the Tyumen region, the Russian company said.

“The document stipulates that Pertamina may join the project and have a share of up to 37.5% and the action plan for the sides to set up a joint venture and sign the necessary legally binding agreements in the short-term prospect,” the statement said.

Rosneft will have operational control of the planned joint venture.

Tyumenneftegaz, a subsidiary of Rosneft, has a license to develop the Russkoye oil and gas field. The full-scale development of the field is expected in 2017.

Project on Sakhalin shelf 

Pertamina may purchase 20% in the Severnoye Chaivo project on Sakhalin’s shelf, according to Rosneft.

“Rosneft and Pertamina have laid the foundation of cooperation in the area of joint development of shelf fields. The companies have signed a memorandum of understanding in cooperation on the Severnoye Chaivo project,” the statement said.

The sides plan to agree on the legally binding documents on the purchase by Pertamina of a share of up to 20% in the project. Pertamina’s participation in the project on the territory of Russia is expected to become a basis for further implementation of joint projects in Russia between the companies. The northern tip of the Chaivo field is located within shallow-water area of the northeast Sakhalin shelf. The participants of the project plan to reach design capacity for oil in 2017 and for gas in 2027.

On May 26, 2016, Rosneft and Pertamina signed a framework agreement on cooperation implying the analysis of prospects of implementing joint projects in the supplies of oil and oil products, logistics and infrastructure. The deal also envisages a possibility for Pertamina to join Rosneft’s projects as a shareholder in the area of exploration and production in Russia and partnership in joint ventures on oil processing.