Indonesia's state energy company Pertamina has secured around $3.1bn in financing to fund the upgrade of the Balikpapan refinery on Borneo Island in East Kalimantan, to strengthen national energy resilience.

The project financing agreement has been signed with a number of export credit agencies including Export–Import Bank of Korea, Korea Trade Insurance Corporation, Italy’s Servizi Assicurativi del Commercio Estero and US EXIM, and 22 commercial banks.

Proceeds from the financing will be used by Pertamina to fund the Balikpapan Refinery Development Master Plan (RDMP).

With the expansion project, the Balikpapan oil refinery’s capacity is expected to increase from 260,000 barrels per day (bopd) currently to 360,000bopd.

In a press statement, Pertamina said: “The Balikpapan RDMP project will become an environmentally friendly refinery as it can significantly reduce emissions through energy efficiency in operations and the production of future products, thereby supporting the government's net-zero emission programme.”

Upon completion of the expansion, the refinery will have capacity to produce fuel with Euro V emission standards.

Pertamina Corporate Communication vice-president Fadjar Djoko Santoso said: "With the increased refinery capacity, Pertamina will be able to produce more environmentally friendly fuel, which undoubtedly supports Indonesia's Net Zero Emission achievement.”

Pertamina president director Nicke Widyawati said : "The Balikpapan Refinery will be able to process almost all types of crude oil, with advanced processing capabilities, enabling us to search for crude oil more efficiently and at a lower cost, even those with high sulphur content. The quality of the products will improve from Euro 2 to Euro 5."

Recently, Pertamina secured a long-term extension to its contract to develop the Menzel Ledjmet Nord oil and gas block in Algeria. The block has a capacity of 35,000bopd.