Taiwan-Indonesia petrochemical plant to be built in Balongan: report

Jakarta, May 30 (CNA) A joint petrochemical complex planned by Taiwan's state-owned oil company CPC Corp. and its Indonesian partner PT Pertamina will be located in Balongan, West Java, Sindonews reported Friday.

The Indonesian news media cited Airlangga Hartarto, Indonesia's Coordinating Minister for Economic Affairs, as saying the state-run Indonesian oil and gas company, and Taiwan's CPC have entered into the final stage of talks about the investment.

The planned petrochemical zone, which involves investment of US$12 billion, will be located in Balongan, he added.

Airlangga said the two sides are finalizing the details of the plan which is one of the 245 national strategic projects under President Joko Widodo's government, including toll roads, railroads, airports, harbors, refineries, gas distribution and irrigation projects.

The comments came after a meeting of the Indonesian government on Friday. While Indonesia is among the countries hit by the COVID-19 pandemic, work on the 245 national strategic projects continues, paving the way for national economic growth.

After CPC closed its fifth naphtha cracker project in Kaohsiung in 2015, the Taiwanese oil refinery operator decided to relocate its decommissioned plant to Indonesia.

CPC and PT Pertamina held many talks over an earlier plan but that was scrapped after negotiations failed to make progress. Pertamina argued that it was not worth the cost and the money would be better spent building a new plant.

However, in October 2018, the two companies signed an agreement on a framework for a joint petrochemical zone after talks resumed.

In January 2020, Agus Gumiwang Kartasasmita, the Indonesian Minister of Industry, said CPC is expected to invest US$8.6 billion in the joint investment project with an unnamed Indonesian official saying the location of the new investment could be Balongan.

On Friday, Airlangga confirmed the location, according to Sindonews.