PT Pertamina oil refinery plant at the port city of Balikpapan in East Kalimantan, Borneo, Indonesia.
Bloomberg | Bloomberg | Getty Images
Indonesian sovereign wealth fund Danantara plans to sign an $8 billion engineering, procurement and construction contract with U.S. engineering firm KBR Inc to build 17 modular refineries, according to two sources familiar with the matter and an official economic ministry presentation seen by Reuters.
The contract is part of last week’s trade pact between Indonesia and the United States that led to a reduction in the threatened U.S. proposed tariff rate to 19% from 32%.
Airlangga Hartarto, Indonesia’s economic affairs minister and the chief negotiator of the deal, disclosed the modular refinery plan during a closed-door briefing to Indonesian business leaders on Monday evening. Two sources confirmed the planned deal was mentioned in a presentation that Reuters also reviewed.
Danantara and KBR Inc, formerly known as Kellogg Brown & Root, did not immediately respond to requests for comment.
While some details of the trade deal between the United States and Indonesia have been made public, such as for increased energy cooperation, the proposed contract for refineries has not previously been reported.