Pertamina, the Indonesian national energy company, and PTTGC, the Thai leading Petrochemical producer, have advanced its partnership and collaboration by entering into the Manufacturing JV - HOA to proceed further with the feasibility study of the world-scale petrochemical complex. This collaboration advancement comes after the completion of the extensive project preliminary feasibility study - a part of the partnership HOA signed earlier since April 2013.
This Manufacturing JV - HOA is aimed to further materialize the agreed joint venture principles and investment scope, as well as enable both parties to finalize the project details by early 2014 prior to conducting the detail bankable feasibility study and Front End Engineering Design (FEED).
Pertamina and PTTGC have reached the project definition understanding, including a common goal and objective, a competitive investment model and appropriate site specification, as well as each party’s strength to be leveraged for building JV’s competitiveness. This will move forward for final investment decision, anticipated in 2015.
In addition the exhaustive Indonesia polymer market survey has been jointly conducted through the distribution and marketing activities of both parties, where the initial complex configuration has been defined and technical study of such investment scope has been assessed, assuring the parties aspiration in being part of Indonesian a better living and self-sufficient society.
Meanwhile, domestic demand for petrochemical products is expected to increase, due to the positive trend of manufacturing sector. Indonesian petrochemical market value is expected to reach US$ 30 billion in 2018 and the JV Company is targeting to control 30% of market share after the Petrochemical Complex commercially operate in 2018. Currently, the production of petrochemical in Indonesia is still insufficient to meet the downstream industry needs, creating large import to the amount of US$ 5 billion per year.
Karen Agustiawan, President Director and CEO of Pertamina, stated, “Today’s announcement is a crucial proof of Pertamina’s commitment to this high priority collaboration and investment.
"The project will represent a key milestone of Pertamina’s ambitious downstream petrochemical development strategy; therefore Pertamina is bringing the best potential investment conditions for further project feasibility study refinement; including the complex location providing best economics competitiveness through refinery integration, feedstock security and supportive fundamental infrastructure”.
“We are pleased to have PTTGC as our partner, as they bring a comprehensive industry experiences from their record of success in the chemicals business. PTTGC’s intensive expertise and our culture similarities are perfectly the essences of our long term business partnership in building Indonesia petrochemical flagship.” said Karen Agustiawan.
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