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Location of Taiwan-Indonesia naphtha cracker uncertain

2018/10/17 17:37:33

CPC Corp., Taiwan Chairman Tai Chein (戴謙, front, right) and PT Pertamina President Director Nicke Widyawati (front, left) / photo courtesy of CPC Corp., Taiwan

Jakarta, Oct. 17 (CNA) Following the inking of a memorandum of understanding (MOU) last week between Taiwan and Indonesia to build a naphtha cracker in Indonesia, two sites are being assessed for the establishment of the facility, according to an Indonesian source.

The planned plant could be built in Tuban, a town located on the north coast of Java approximately 100 km west of Surabaya, or in Balongan in west Java, a source from Indonesia's state-owned oil and gas holding PT Pertamina told CNA Wednesday.

Tai Chein (戴謙), chairman of the state-owned oil company CPC Corp., Taiwan, which teamed up with Pertamina in the NT$200 billion (US$6.47 billion) joint venture, said the two sides are conducting a feasibility study on the construction of the new naphtha cracker and are expected to come up with a comprehensive investment project in the first half of 2019.

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

Despite the signing of the MOU Oct. 11, CPC did not disclose the news until Tuesday to ward off possible interference from China, Tai said.

Rini Soemarno, minister for state-owned enterprises of Indonesia, commented that the naphtha cracking plant, which is estimated to produce 1 million metric tons of ethylene per year, will help the country save US$2.4 billion in imports.

Nicke Widyawati, chief executive of Pertamina, said Indonesia hopes to have the new naphtha cracker begin operations in 2026 to help increase added value to derivatives produced by Pertamina.

(By Jay Chou and Flor Wang)