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PTTGC and Pertamina in talk for Indonesia Petrochemical Complex

PTTGC – Pertamina to sign Java Complex joint venture

The Thailand-based PTT Global Chemical plc (PTTGC) and the Indonesian national oil company (NOC) Pertamina are in final talks to establish a joint venture to build from greenfield a world-scale petrochemical complex in Java, Indonesia.

This process is following up a heads of agreement (HOA) signed earlier in April 2013 between the both companies to start shaping the guidelines of such alliance.

This project is popping up as priority for the Indonesian Government in order to meet its domestic demand for plastics and fibers that require today to be imported.

PTTGC_Pertamina_Java_Petrochemical_Complex_MapWith a sustainable economical growth exceeding 5% per year the Indonesia market is exploding for imported petrochemical products, thus affecting the country trade balance.

In the same time, Indonesia has initiated vast exploration and production program to increase its oil and gas production that are today exported.

A part of this oil and gas production could well be allocated to feed local refineries and petrochemical complex.

In that respect, Indonesia is currently investigating several refinery projects together with mainly national companies from the Middle-East and China.

In this context, the next stage of Indonesian Government is to ramp up petrochemical capacities.

Thanks to the large size of the country and its domestic market, Indonesia may consider to establish world-scale chemical facilities as first project.

For this Java petrochemical complex, PTTGC and Pertamina are planning to invest $4 billion capital expenditure.

According to the terms of the HOA signed in April, the joint venture between both companies should be based on:

 – PTTGC 51%

 – Pertamina 49%

This split of the working interests may evolve in the future as both partners are currently for third parties to join this first Indonesian Petrochemical Complex project.

PTTGC – Pertamina to build 1 million t/y Java cracker

From the first conclusions of the feasibility study, the Java Petrochemical complex, should include:

 – Refinery

 – Olefins plant

 – Downstream polymers units

Based on this architecture, PTTGC and Pertamina are considering to produce:

PTTGC_Pertamina_Java_Petrochemical_Complex – 1 million tonnes per year (t/y of ethylene and propylene

 – 400,000 t/y of polyethylene (PE) and polyvinyl chloride (PVC)

 – 350,000 t/y of polypropylene (PP)

At the stage of the feasibility study, it is still unclear what feedstock should be selected to supply the Java Petrochemical Complex.

Originally the project was thought with a 1 million t/y naphtha cracker, but the competitive gas prices and the development of the upstream projects in Indonesia may motivate PTTGC and Pertamina to evaluate mixed cracker solution.

If themixed cracker should increase costs and the complexity of the project, in compensation it will give more flexibility to adjust  production according to naphtha or ethane feedstock availability or prices and to the portfolio and petrochemical products to be deployed downstream.

 PTTGC and Pertamina are planning to complete the feasibility study early 2014 in order to move on the front end engineering and design (FEED) in following so that Java Petrochemical Complex project could come on stream in 2018.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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