The government of Indonesia wants to construct the Bontang oil refinery in East Kalimantan through a private-public partnership (PPP). Sudirman Said, Minister of Energy and Mineral Resources, said construction of the Bontang oil refinery is scheduled to commence in 2017. State-owned energy company Pertamina will be in charge of the project and is now searching for investors to participate in the project which is estimated to require a total of $14.5 billion in investment.

In order to see groundbreaking in 2017 Pertamina should manage to find an investor before October 2016. Indonesia’s Finance Ministry will hire a team of international consultants to assist Pertamina finding the right partner. The state-owned energy company will hold an auction to select the investor. Given the large capital required (estimated at $14.5 billion) Pertamina cannot realize this project by itself. However, given the low global oil prices it may be tough to find a partner.

The Indonesian government also announced it offers incentives to lure investors. These incentives are the free use of existing infrastructure at the refinery site (hence reducing investment costs). Currently, there already exist adequate roads and ports in the area. Furthermore, there is sufficient electricity supply. The government also assures that there will be no trouble related to the land certification process. Lastly, it offers a tax holiday to the investor (that can be extended up to 15 years).

This Bontang oil refinery is one of the government’s ten priority projects.