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etrochemical producer PT Tuban Petrochemical Industries (TPI) has asked one of its shareholders, state oil and gas company PT Pertamina, to provide financial support to help it expand its paraxy-lene plant.

TPI president director Amir Sambodo said last week the planned expansion would require around US$500 million in total and the project could start as early as the beginning of next year if Pertamina decide to lend a hand.

Pertamina controls a 15 percent stake in Tuban Petrochemical Industries.

"We can *carry out the project* only in the next two years, *up to* 2011, with the assumption that we entirely rely on the Tuban group's *own capital*," he said during an exhibition held during the Jakarta International Expo.

"If Pertamina wants *to join us*, we can *start* faster, early next year."

Amir said Pertamina has been notified about this, but with no responses so far.

Pertamina spokesman Basuki Trikora Putra could not be reached for comment.

The expansion project aims to increase TPPI's annual production to 1.2 million tons of paraxylene in total, he said, enough to meet annual domestic demand.

In addition to financial obstacles, Amir said the project also faced lack of feedstock as the Energy and Mineral Resources Ministry was unable to give forward guarantees on the supply of additional condensate feedstock for the planned expanded factory.

Therefore, TPI would likely import sour condensate as raw material from Qatar, he said.

Amir said an immediate expansion of the paraxylene factory was urgent as demand was growing continuously, and the implementation of a free trade agreement (FTA) between the Association of Southeast Nations (ASEAN) and China was "imminent".

Paraxylene is a raw material to produce purified terephthalic acid (PTA) - the main ingredient of synthetic fiber for textiles, such as polyester.

"*Without expansion in domestic paraxylene output*, our *plastic* industry will be doomed once the CEPT (common effective preferential tariff) and the (ASEAN-China) FTA become effective (as the two agreements entirely scrap import duties on plastics, among other items)," said Amir.

The CEPT provides for tariff reduction schedules agreed as part of FTA arrangements among ASEAN members.

Similarly, also in the petrochemical industry, polypropylene producer PT Polytama Propindo (Polytama) also plans to expand production capacity from 280,000 tons to 440,000 tons, with a total investment of US$20 million, by integrating its existing production facilities, according to Amir.