PTTGC, Pertamina petchem complex in Indonesia to start up by 2020

Nurluqman Suratman

15-Aug-2014

SINGAPORE (ICIS)–PTT Global Chemical (PTTGC) and Pertamina will build their joint venture petrochemical complex in Balongan, West Java, Indonesia, with start-up of operations expected by 2020, a PTTGC source said on Friday.

Their joint venture firm called Indo Thai Trading (ITT) will build the world-scale complex, which will have a cracker, which will produce 1m tonnes/year of olefins, and downstream facilities for the production of polyethylene (PE), polypropylene (PP) and monoethylene glycol (MEG), PTTGC said in a statement e-mailed to ICIS.

In December last year, Thailand’s PTTGC and Indonesian state-owned energy firm Pertamina have agreed to proceed with the project that was first announced in April 2013.

PTTGC has a 49% stake in the joint venture, with Pertamina owning the majority of 51% of ITT.

“Having a production base in Indonesia, the company has a good opportunity to expand its business into other Asian countries,” PTTGC president and CEO Bowon Vongsinudom said in the statement.

Indonesia’s growing population, now at almost 300m, will ensure solid demand growth for petrochemical products in the future, Vongsinudom said.

Indonesia’s petrochemical imports were at around $8bn in 2013, according to the Indonesian Olefin, Aromatic and Plastic Industry Association. The country produced about 1.8m tonnes of petrochemical products last year, just slightly above half its overall consumption, which is pegged at around 3.5m tonnes.

“The joint investment for establishment of the petrochemical complex … would help to reduce Indonesia’s import by around $24bn-30bn or 30% of the Indonesia polymer market in 2025,” Vongsinudom said.

In the first stage of the collaboration between PTTGC and Pertamina, the products from the two firms will be sold through ITT to the domestic market, he added.

In a recent press conference, Vongsinudom was quoted in the Thai media as saying that PTTGC will likely boost its investment budget for the Indonesia project from $5bn initially to $8bn, as it seeks to increase the capacity of the oil refinery at Balongan from 125,000 bbl/day to 360,000 bbl/day.

A preliminary decision on the structure of the joint venture project has yet to be settled, and that more strategic investors could be roped into the project, according to news daily Bangkok Post.

Basic engineering designs and the final investment decision will be made in 2015, with construction expected to begin a year later, it said.

READ MORE

Global News + ICIS Chemical Business (ICB)

See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.

Contact us

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?