Indonesia Plans US$8 Billion Modular Refineries With KBR

• Danantara will sign a US$8 billion deal with KBR Inc. to build 17 modular refineries in Indonesia.

• The project is part of a broader US–Indonesia trade pact, signaling closer economic ties.

By Kenzie Aryasatya, Fayza Nawra Avanitanya, Muthia Noor Safitri, Imam Fakhri Prayogo Harianto 

July 25, 2025 at 16:30 GMT+7

Indonesia is taking a major step toward energy resilience through an US$8 billion deal between local energy player Danantara and US-based KBR Inc. The agreement involves building 17 modular refineries to boost domestic fuel processing capacity and reduce dependence on imports. 

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Using modular technology that enables faster and region-specific deployment, the project supports Indonesia’s goal of strengthening its energy infrastructure and ensuring long-term national security.

The plan, which was disclosed during a closed-door briefing, was included in an official economic ministry presentation. It forms part of a broader trade pact between Indonesia and the US, reflecting a growing strategic alignment rooted in mutual interests and long-term cooperation.

KBR, Inc. sign in its Houston based headquarters | Source: AlchemPro

On Monday (7/07), developed alongside the refinery initiative, the trade agreement marked a breakthrough in Indonesia-US economic relations, securing a reduced tariff rate of 19%, down from 32%. 

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Indonesia became the first country to finalize such a deal with the US, a milestone largely driven by the leadership of Economic Minister Airlangga Hartarto. This achievement reflects the ongoing development of economic ties between the two nations and paves the way for more strategic collaborations in the future. 

The refinery project, as part of this broader initiative, shows how Indonesia is aligning infrastructure development with international diplomacy to help secure better trade terms and to assert a stronger, more visible global economic presence.

A sign for Indonesia's sovereign wealth fund Danantara in its headquarters | Source: Reuters (Willy Kurniawan)

The refinery agreement forms part of a broader US–Indonesia trade package valued at up to US$34 billion, spanning key sectors such as aviation, agriculture, and energy. 

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Among the highlights are major aircraft acquisitions, expanded agricultural exports, and a US$2 billion ammonia project in Louisiana. This far-reaching economic agreement not only reflects the scale of bilateral cooperation but also signals Indonesia’s rising role in global trade and industry. 

With projections indicating a 0.5% point boost to national GDP, the deal is expected to unlock stronger investor confidence and drive long-term growth. More than a contract, it marks a bold stride toward a more resilient, connected, and forward-looking Indonesian economy.

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Source:

CNN

Reuters