Indonesian petrochemical firm Chandra Asri and Kilang Pertamina Internasional (KPI), a subsidiary of state-owned Pertamina, will collaborate to develop the country's petrochemical business.
The agreement, signed on 25 August, seeks to increase domestic production of petrochemicals and reduce the country's import dependency.
Indonesia is a net importer of polymers and imports more than 50pc of its domestic requirements. It imported around a combined 700,000 t/yr of linear low-density polyethylene (LLDPE) and high-density polyethylene (HDPE) and 1.2mn t/yr of polypropylene (PP) in 2019, according Global Trade Tracker data.
Pertamina has plans to build its own petrochemical plant by 2026 but is keen to also develop an integrated refinery and petrochemical complex with Chandra Asri. The state-owned firm produced up to 920mn b/d of oil in 2018. It operates six refineries with a total refining capacity of around 1.05mn b/d. It also runs a 45,000 t/yr PP unit.
Pertamina is also working together with Russia's state-owned Rosneft to build a 300,000 b/d refinery and petrochemicals complex in Tuban, east Java, by 2026. The petrochemical complex will have a designed capacity of around 5.85mn t/yr for downstream derivatives, including diethylene glycol, ethylene glycol, paraxylene, styrene monomer, polyethylene (PE) and PP.
Chandra Asri is Indonesia's largest petrochemicals producer and operates a 900,000 t/yr ethylene cracker, a 736,000 t/yr PE unit and a 590,000 t/yr PP plant. It plans to increase its ethylene, PE and PP production by another 1.1mn t/yr, 750,000 t/yr and 450,000 t/yr, respectively, at its second petrochemical complex in Cilegon from 2024 onwards. Its new PE facility in Cilegon will also have a 300,000 t/yr low-density polyethylene plant and 450,000 t/yr HDPE unit.
Abu Dhabi's state-owned Adnoc has signed deals with Pertamina and Chandra Asri to support Indonesia's downstream sector.
Adnoc has agreed a deal to sell 528,000t of LPG to Pertamina by the end of 2020. Adnoc has also signed an initial agreement to explore supplying naphtha to Chandra Asri, for use as a feedstock at the company's 900,000 t/yr cracker and potential new 1.1mn t/yr cracker at its petrochemical complex in Cilegon.
Pertamina is a major importer of LPG for Indonesia's substantial and expanding domestic market, with use of the fuel expected to reach almost 8mn t this year.
