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CPC signs MOU to build joint naphtha cracking plant in Indonesia

2018/10/16 18:29:29

CPC Chairman Tai Chein (戴謙) / CNA file photo

Taipei, Oct. 16 (CNA) State-owned oil company CPC Corp., Taiwan, said Tuesday that it has signed a memorandum of understanding (MOU) with an Indonesian firm to build a naphtha cracking plant in the Southeast Asian country.

Under the MOU, CPC and PT Pertamina, a state-run Indonesian oil and gas company, will invest a total of about NT$200 billion (US$6.47 billion) to build the naphtha cracking plant.

CPC and Pertamina are each expected to hold a 45 percent stake in the joint venture, while Taiwanese and foreign companies in the petrochemical downstream sector will take the remaining 10 percent.

CPC Chairman Tai Chein (戴謙) told CNA that Indonesia has given the companies a choice of five locations for the new plant but a decision on that aspect of the project, and also on how the money will be spent, will not be disclosed until sometime in the first half of 2019.

Pertamina and CPC inked the MOU on Oct. 11 but the Taiwanese firm kept it under wraps until Tuesday for fear that China would try to intervene, according to Tai.

He said the signing of the MOU was witnessed by officials from Indonesia's ministry of economics and trade, and other guests.

CPC said it had been planning to relocate its decommissioned naphtha cracking plant in Kaohsiung to Indonesia but scrapped that plan after Pertamina argued that it was not worth the cost and that the money could be used instead to build a new plant.

(By Tsai Peng-min and Frances Huang)