The Indonesian government plans to build an oil refinery in the East Java town of Situbondo with the construction project estimated to cost 3 billion U.S. dollars to be funded by a Russian consortium, a report said Friday.

The refinery will occupy an area of 400 hectares in coastal Situbondo, some 850 km of Jakarta, reported Bisnis Indonesia newspaper.

The joint operation contract with the Russian investors, whose names were not disclosed, would be signed in November, East Java Governor Imam Utomo was quoted as saying.

"President Susilo Bambang Yudhoyono himself will sign the memorandum of understanding," he said.

Apart from oil refinery, the cooperation agreement with the Russian partners also will cover technology and tourism, he said.

The would-be refinery will have initial production capacity of 150,000 barrels per day, but can be doubled to produce gasoline, diesel fuel and lubricant oil.

The Russian consortium will cooperate with PT Petrogas Jatim Utama, an oil company belonging to the East Java provincial government, in building and operating the refinery.

Source: Xinhua