Pertamina plans to set up naphtha cracker in Indonesia

20 Dec '12

2 min read

Indonesian state-owned firm PT Pertamina (Persero) is planning to build and commission a naphtha cracker in the country, in partnership with one of the three international companies short-listed by it.

The construction of naphtha cracker forms part of the company’s aim to grab up to 80 percent of national petrochemical market by 2025, a goal believed will be achieved through partnership with national and multinational companies.

For initial phase, Pertamina will carry out the naphtha cracker construction project with the capacity of 1 million tons per year, producing assorted superior petrochemical products. The project requires not less than US$5 billion investment.

To realize the plan, Pertamina has signed the Memorandum of Understanding with three multinational petrochemical companies – South Korea’s SK Global Chemical, Thailand’s PTT Global Chemical, and Japan’s Mitsubishi Corporation -- all of whom are renowned petrochemical companies in Asia.

Within four months since the signing of the agreement, Pertamina will select one company among the three based on its capability to meet the criteria, particularly the capability and strength in technology, business network and financial, to be the joint-venture partner to build naphtha cracker.

The naphtha cracker is expected to go operational in 2017, and will have capacity to produce 250,000 tons/year of ethylene, 400,000 tons/year of polyethylene, and 350,000 tons/year of polypropylene, the company said in a statement.

Pertamina and selected partner will then conduct Feasibility Study (FS), which would be completed by the end of 2013. It will be followed by the signing of the joint-venture to build the petrochemical plant in December 2013.

At present, Pertamina meets only around 10 percent of national petrochemical demand and the company aims to grab a 30 percent market share in 2017, when the naphtha cracker becomes operational.

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