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CPC, Pertamina to build petrochemical complex in West Java

June 05/2020

MOSCOW (MRC) -- A joint petrochemical complex planned by CPC Corp., from Taiwan and state-owned energy producer, PT Pertamina is to be built in Balongan, West Java, said senior minister last week, said Theinsiderstories.

The projects is estimating need costs USD12 billion and to start operating in 2026. Coordinating minister for economic affairs, Airlangga Hartarto told reporter through a video conference said, that both have entered the final stage of talks over the investment. Now, the two companies are finalizing details of the plan, which is one of 245 national strategic projects being run by President Joko Widodo government, which include toll roads, railroads, airports, harbors and refineries, as well as gas distribution and irrigation systems.

Early January, CPC Corp. announced is committed to investing USD22 billion for the development of the Balongan petrochemical refinery. In 2018, the company and Pertamina has signed a USD6.49 billion framework agreement for the project. Its estimating, CPC it will take an investment around USD700 million to construct a new plant with an annual capacity of 1 million metric tons of ethylene.

The cooperation between the producers 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. The Indonesian operator is committed to diversifying its business into new and renewable energy segments to support the government program for an energy mix portions of 25 percent by 2025.

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.

Currently, Pertamina petrochemical processing capacity is only 700 kilotons per annum. Its capacity will increase gradually as the refinery mega project is completed consisting of two new refineries includes Tuban and Bontang, and four revitalized refineries such as Balikpapan, Cilacap, Balongan, and Dumai.

In 2026, the plant will be able to produce around 6,600 kilotons per year of petrochemical products. So far, the country spends USD3 billion per year to import oil and gas which is almost 70 percent of the country national needs.

Recently, CPC has been set up to build and operate a lubricant oil blending plant together with a solvent and chemicals storage complex in Vietnam and thence from that base to explore the Southeast Asian market for those products. This project is the second investment case for the company under the New Southbound Policy, the first being Daihai Petroleum Corporation an LPG import and marketing joint-venture, located in the port city of Haiphong in northern Vietnam along with TASCO Group, Chin Lead Co., and HPI Co., local branch.

Since CPC closed its fifth naphtha cracker in Kaohsiung in 2015, the Taiwanese firm has been seeking to relocate its naphtha operations to Indonesia. CPC and Pertamina had previously discussed a plan that was scrapped after negotiations failed to make progress.

As mRC informed earlier, PT Pertamina will develop its Cilacap refinery in Central Java independently, the state energy company said, dropping a plan to boost capacity through a joint venture with Saudi Aramco. The two companies have been in talks to upgrade the Cilacap refinery since 2016 and last year said that they would finalise a joint venture plan in the first quarter of 2020.

As MRC informed earlier, Pertamina carried out planned maintenances at the liquid catalytic cracking unit in Balongan (Balongan, West Java, Indonesia). Repair work on this installation with a capacity of 180,000 tonnes/year of propylene started on 19 March of this year and ended on 19 April.

Propylene is a feedstock for producing of  PP.

According to MRC's ScanPlast report, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

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).
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, propylene, ethylene, petrochemistry, Pertamina.
Category:General News
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