TO be located in Riau province, the refinery is expected to begin construction in 2016.
Indonesian Energy and Mineral Resource Minister Sudirman Said was quoted by The Jakarta Post as saying: "It has prepared $7bn in total and is now in the process of obtaining a permit.
"Ground-breaking of the refinery project is expected to be as early as next year,"
The proposed plan also includes construction of storage facilities, with an option to expand into petrochemicals.
Said told Reuters that the Indonesian state-owned company Pertamina will purchase the oil products produced from the refinery, which will source crude oil from Oman.
Indonesia plans to increase its crude oil supplies to address its mounting demands.
In line with this effort, Pertamina earlier announced plans to upgrade four of its six refineries currently processing around 850,000bpd that is far below their expected capacity of one million bpd.
The firm is also planning to build three new refineries to boost its production capacity to 2.3 million barrels from the current one million barrels.
