Taiwan and Indonesia team up to build a naphtha cracker

CPC, a Taiwanese energy company, signed a pact with Indonesian oil and gas company, Pertamina, to construct a naphtha cracker.

Read: US to be largest exporter of light naphtha by 2020; oversupply expected

The Memorandum of Understanding (MoU) agrees that the two companies will invest a total of around US$6.5 billion to build the plant at an undecided location in Indonesia. Each company is expected to hold a 45% stake in the joint venture, with the remaining 10% will be held by Taiwanese and foreign companies in the downstream petrochemical sector.

According to Tai Chein, CPC’s chairman, Indonesia has given has shortlisted five locations for the new plant but a decision will not be revealed until sometime during the first half of 2019.

CPC wanted to relocate its decommissioned naphtha cracker in Kaohsiung to Indonesia but Pertamina bid for the money to be used to build a new plant instead.

In August, Indian Oil announced that CPC was considering investing US$6.6 billion in a petrochemicals complex at its refinery in Paradip, India.