Indonesia's TPPI will resume aromatics production at its Tuban-based plant from the end of September to December at the expense of gasoline under an existing third-party processing agreement with state-owned refiner Pertamina.
TPPI has been focused on gasoline production since August 2019, on expectations of narrowing margins for aromatics. But gasoline demand has been disrupted in the country as the government has imposed travel restrictions to curb the Covid-19 outbreak since April.
TPPI operates a 100,000 b/d splitter and a 50,000 b/d reformer, with gasoline production at around 60,000 b/d. The splitter converts condensate into light and heavy naphtha. The heavy naphtha is typically used as a reformer feedstock to produce high-octane gasoline blendstock. The blendstock is then blended with naphtha to produce gasoline.
Aromatics margins are still below breakeven for most producers but Pertamina decided to switch back to producing aromatics as demand for gasoline is already secured via term imports through to December.
TPPI will operate the Tuban complex in east Java in a dual mode to produce aromatics and gasoline together. The aromatics complex has a nameplate capacity to produce up to 550,000 t/yr of paraxylene (PX) and 360,000 t/yr of benzene.
PX production margins have been around $150/t for the past three months because of weak demand as well as oversupply. The cfr China/Taiwan PX price was at $558/t yesterday, while the premium to cfr Japan naphtha prices was at $163.37/t, according to Argus data.
