Hyundai Engineering has landed a $2.2 billion refinery development project deal in Balikpapan in Borneo, Indonesia, reestablishing its position as a powerful player in the petrochemical market, the company said Wednesday.

Indonesia is the biggest petroleum producer among the Association of Southeast Asian Nations. The Balikpapan refinery is located in the East Kalimantan province, some 20 kilometers from the new capital of Indonesia. 

According to Hyundai Engineering, Indonesia’s state-owned petroleum company PT Pertamina inked a large-scale deal to upgrade a refinery in Balikpapan on Sept. 16. The deal is worth $4 billion, of which Hyundai Engineering’s part accounts for $2.2 billion.

With this deal, Hyundai Engineering has clinched overseas deals worth a total of $4 billion in 2019. It clinched a $1.1 billion plant project in Poland in May and a $534 million power plant project in the US’ Guam in June.

Under the deal with PT Pertamina, Hyundai Engineering will expand the daily output capacity of the Balikpapan refinery from the previous 260,000 barrels to 360,000 barrels. It will also upgrade the refinery to Euro V standards, which is a barometer for the ability to produce environmentally friendly fuel. The construction will take 53 months.

Indonesian President Joko Widodo announced Aug. 26 that the East Kalimantan province -- the Indonesian side of Borneo Island -- would be the new capital of Indonesia, to jump-start the economy in other parts of the archipelago nation.

The Balikpapan refinery is some 1,000 kilometers northeast from the current capital Jakarta.

By Lim Jeong-yeo (kaylalim@heraldcorp.com)