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Taiwanese CPC to Invest USD22B for petrochemical plant

January 24/2020

MOSCOW (MRC) -- Taiwanese state-owned oil refiner CPC Corp. is committed to investing USD22 billion for the development of the Balongan petrochemical refinery, reported InsiderStories with reference to the senior minister's statement.

In 2018, the company and Indonesias oil and gas holding PT Pertamina has signed a USD6.49 billion framework agreement for the project.

"Later Pertamina will not be too active and have a large portion in the development of the Balongan petrochemical refinery. The CPC will be active in the production, processing, and marketing of petrochemical products," Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan told reporters at his office.

The cooperation between Pertamina and CPC is carried out in the form of the construction of a global-scale naphtha cracker plant and a global petrochemical downstream development unit in Indonesia, Pandjaitan said.

"CPCs appointment is not without reason. CPC has been known as one of the leading companies in the international petrochemical industry. The company is expected to be an entry point for Pertamina to compete," the minister revealed.

The Indonesian operator is committed to diversifying its business into new and renewable energy segments as support for the government program for an energy mix that targets new and renewable energy portions of 25 percent by 2025, the minister adds.

Later the naphtha cracker plant is expected to produce at least one million tons of ethylene per year and build a downstream unit that will produce other refined derivative products to meet the needs of the world industry, especially in Indonesia.

Several stages of refinery construction that must be carried out this year include completing a pre-feasibility study (FS), then starting a bankable feasibility study (BFS), environmental impact assessment (EIA) and land reclamation. The refinery is expected to start operating in 2026, Pandjaitan said.

Currently, Pertaminas petrochemical processing capacity is only 700 kilotons per annum (ktpa). However, its capacity will increase gradually as the refinery megaproject is completed consisting of two new refineries includes Tuban and Bontang, and four revitalized refineries such as Balikpapan, Cilacap, Balongan, and Dumai.

"In 2026, we will be able to produce around 6,600 ktpa of petrochemical products," the minister said, adding the country spends USD3 billion per year to import oil and gas which is almost 70 percent of the countrys national needs.

Previously, the Abu Dhabi National Oil Company (ADNOC) has signed a deal with Pertamina for oil and gas collaboration in both countries. As a part of the deal, which is estimated to be worth USD2.5 billion, the two companies will collaborate to build a liquefied petroleum gas (LPG) storage facility in Indonesia.

Indonesia spends USD3 billion per year to import LPG which is almost 70 percent of the countrys national needs. Last year, Indonesia suffered a trade deficit of USD500 million in its trade with the United Arab Emirates (UAE). While the countrys imports from the UAE were worth USD2 billion, its exports stood at USD1.5 billion.

As MRC informed before, on 8 November 2019, CPC Corporation took one of its naphtha crackers off-stream for major maintenance work. The cracker number 4 was expected to remain offline for about 65 days. The No. 4 unit has an annual capacity of 380,000 tons/year of ethylene and 193,000 tons/year of propylene. The shutdown would result in a production loss of 67,671 tons of ethylene and 34,370 tons of propylene.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
Author:Margaret Volkova
Tags:PP, PE, homopolymer PP, propylene, ethylene, CPC, Pertamina, Indonesia, Russia, Taiwan.
Category:General News
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