TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Thai PTT takes part in $5b petchem project

In a bid to strengthen its position in the domestic petrochemical market, Indonesia’s state-owned energy firm PT Pertamina decided this week to team up with PTT Global Chemical, a subsidiary of Thailand’s oil and gas company PTT Pcl, for a US$5 billion petrochemical complex

Amahl S. Azwar (The Jakarta Post)
Jakarta
Thu, March 14, 2013

Share This Article

Change Size

Thai PTT takes part in  $5b petchem project

I

n a bid to strengthen its position in the domestic petrochemical market, Indonesia’s state-owned energy firm PT Pertamina decided this week to team up with PTT Global Chemical, a subsidiary of Thailand’s oil and gas company PTT Pcl, for a US$5 billion petrochemical complex.

Pertamina president director Karen Agustiawan said in a statement made available to The Jakarta Post recently that the country’s most valuable state-owned firm would sign the agreement with PTT Global Chemical in April this year.

In addition, she said, Pertamina wanted to establish a new joint venture to focus on the petrochemical business with the Thai firm by the end of December this year.

“PTT Global Chemical has a global reputation in the petrochemical business,” acknowledged Karen.

“The newly-formed partnership aims to not only build a petrochemical complex but will also include market and research activities to [ensure the production of] high-quality products that capture the market share of the petrochemical business in Indonesia and Asia.”

In mid-December 2012, Pertamina signed preliminary agreements with three foreign companies: South Korea-based SK Group’s subsidiary SK Global Chemical, Japan’s Mitsubishi and PTT Global Chemical before ultimately choosing the latter to build the integrated petrochemical facility.

The facility is expected to begin operations in 2017 with the production capacity of around 1 million tons of petrochemical products every year.

The location of the first large-scale, integrated petrochemical complex has yet to be confirmed, but it is projected to have an annual production capacity of around 250,000 tons of ethylene, which is used throughout the chemical industry along with 350,000 tons of polypropylene for the textile, stationery and plastics sectors.

The plant will also produce 400,000 tons and 200,000 tons of the plastics polyethylene and polyvinyl chloride respectively.

Pertamina is expected to have a share of at least 51 percent in the joint venture while the remaining 49 percent will be held by its partner, Pertamina’s top executives announced last year prior to the selection of PTT Global Chemical.

Separately, PTT Global Chemical chief executive Anon Sirisaengtaksin was quoted by Reuters as saying the Thai firm might invest $1.25 billion for its equity holding and the rest of the funding would be borrowed to back the project.

“The total cost of the project is expected to be around $5 billion with a 50-50 holding with Pertamina, most of the money will be spent during 2015 to 2017,” said Anon.

Anon’s statement differed from Pertamina’s wishes to hold at least 51 percent at the project.

The Thai executive said that both the share holding structure and the final investment figure would be decided later this year.

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.