Indonesia’s state-owned energy producer PT Pertamina and CPC Corp of Taiwan have signed an agreement to follow up on the development of a previously announced integrated petrochemical complex at Balongan, West Java, Indonesia, with an investment of up to US$8 billion and start up planned for 2026. Pertamina and CPC will each hold a 45% stake in the joint venture with the remaining 10% reserved for potential participants.
In 2018, CPC and Pertamina had signed a framework agreement and joint feasibility studies have been carried out since mid-2019 to construct a new plant with a capacity of 1 million tonnes/year of ethylene.
The petchem complex is the third phase of expansion of Pertamina’s Balongan refinery. The refinery, which will supply naphtha feedstock to the complex, will be expanded by 20% to 150,000 barrels/day.
PT Pertamina President Nicke Widyawati said: “This project is an important milestone to strengthen the petrochemical business portfolio so that in the next ten years Pertamina can become a major player in the petrochemical business in the Asia Pacific region. Going forward, Pertamina together with the government and Taiwan’s CPC will continue to strengthen cooperation to complete projects targeted to operate in 2026.”
Indonesia recently announced 89 priority projects worth US$97 billion to be rolled out over four years.
Pertamina is also working with Abu Dhabi National Oil Company (ADNOC) on the project. ADNOC is currently working on a feasibility study which is expected to be concluded in August.
Development of the Balongan refinery forms part of Pertamina’s six-refinery development master plan that aims to double the company’s refining capacity to about 2 million barrels/day. The six refinery projects are at Cilacap, Balikpapan, Balongan, Dumai, Tuban, and Bontang. The company had been planning to develop the Cilacap refinery and aromatics project together with Saudi Aramco but is now going ahead alone after having failed talks.
The Tuban project is being developed between Pertamina and Rosneft (Russia) with a capacity of 15 million tonnes/year of crude oil and the downstream units will be designed to produce 1 million tonnes/year of ethylene and 1.3 million tonnes/year of aromatics. Commissioning is due in 2025.