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Pertamina ends deal with Italian Eni for palm oil fuel project

January 30/2020

MOSCOW (MRC) -- Indonesia state energy company PT Pertamina has ended a partnership with Italian oil, gas and power firm Eni SpA to process palm oil into fuel, reported Reuters with reference to Pertaminas chief executive, who addressed a parliamentary committee.

Pertaminas Nicke Widyawati said during the hearing that Eni required internationally recognised certification for palm oil, in line with European Union moves to curb the use of palm oil as a transport fuel, even though the oil would have been processed in facilities located in Indonesia.

Pertamina and Eni signed a head joint venture agreement last year to build a refinery in Indonesia that would produce fuel completely derived from crude palm oil.

"We have decided to terminate this partnership and replace it with partnership with UOP from the United States for support in technology," Widyawati said, referring to an oil and gas engineering arm of US conglomerate Honeywell International Inc .

She didnt disclose technical or financial details of the dissolution of the Eni partnership, nor of the new accord with UOP.

Eni and Honeywell UOP didnt immediately respond to Reuters e-mails requesting comment sent outside usual business hours.

The European Commission concluded in March that palm oil causes excessive deforestation and should not count as a renewable source of energy, and will effectively be phased out as fuel for transport between 2023 and 2030.

Pertamina is building its new "green diesel" refinery in Plaju, in South Sumatra province, with planned output capacity of 1 million kilolitres (KL) per year and a target of commencing operations in 2024.

Indonesia is the worlds top palm oil producer and President Joko Widodo wants the country to optimise the use of palm-based fuel to curb energy imports, while increasing the consumption of the vegetable oil.

As MRC wrote previously, in November 2018, CPC Corp. of Taiwan and Indonesia's PT Pertamina signed a memorandum of understanding (MoU) to set up a new naphtha cracker in Indonesia. The project, expected to cost USD6.47-billion, would in-volve the production of almost 1-million t/y of ethylene, meeting local demand. 

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.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).

Eni is an Italian multinational oil and gas company headquartered in Rome. It has operations in in 79 countries, and is currently Italy's largest industrial company with a market capitalization of 68 billion euros (USD 90 billion), as of August 14, 2013. The Italian government owns a 30.3% golden share in the company, 3.93% held through the state Treasury and 26.37% held through the Cassa depositi e prestiti. Another 39.40% of the shares are held by BNP Paribas.
Author:Margaret Volkova
Tags:Bioplastiki, PP, PE, crude and gaz condensate, homopolymer PP, propylene, ethylene, petrochemistry, CPC, Eni, Pertamina, Indonesia, Italy, Russia.
Category:General News
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