Adnoc signs Indonesia LPG deal, eyes naphtha sales

Abu Dhabi's state-owned Adnoc has agreed a deal to sell 528,000t of LPG to Indonesian state-owned energy firm Pertamina by the end of 2020.

The deal will allow for both fob and cfr sales, supporting Adnoc's goal to deliver more cargoes to its customers on a cfr basis and build upon its trading and logistics capabilities.

The companies also signed a preliminary agreement to explore the potential development of a crude-to-petrochemicals complex at Balongan in Indonesia.

The two agreements will help Pertamina optimize Indonesia's oil and gas value chain, better serve the domestic market and access new opportunities to meet rising global demand for petrochemical products, Pertamina's chief executive Nicke Widyawati said.

Adnoc also signed an initial agreement to explore supplying naphtha to Indonesian petrochemical firm Chandra Asri, for use as feedstock at the company's existing and potential new cracker complex in Indonesia.

Chandra Asri upgraded its cracker last year, expanding ethylene output to 900,000 t/yr from 860,000 t/yr.

Capacity is expected to double once its second, under-construction petrochemical complex is on line, said Adnoc, Chandra Asri and Pertamina.

The Chandra Asri deal fits with Adnoc's strategy to grow its international petrochemical tie-ups

Pertamina has the capacity to produce around 270,000 t/yr of propylene from its residual fluid catalytic crackers at Cilacap and Balongan.

The agreements were signed during a visit by Indonesian president Joko Widodo to the UAE.

By Iain Packham