"Pertamina has set a target to dominate 80 percent of the petrochemical market in 2025," Pertamina`s Marketing and Commerce Director Hanung Budya said.
Jakarta (ANTARA News) - State oil and gas company PT Pertamina is set to integrate its petrochemical business through cooperation with various multinational companies in an effort to control the domestic petrochemical market.

This cooperation presented an opportunity for the state oil and gas company to increase the economic value of its oil refineries and to control the domestic petrochemical market.

Pertamina`s Marketing and Commerce Director Hanung Budya said here over the weekend that the company would seek to control 80 percent of the nation`s petrochemical market by 2025.

Hanung remarked in a press statement on Saturday that the target of 80-percent control over the petrochemical market will be achieved through cooperation with national and multinational companies.

"Pertamina has set a target to dominate 80 percent of the petrochemical market in 2025," Hanung stated.

He added that in the early stages of achieving this goal, the state oil and gas company will develop a "naphtha cracker" refinery project that will be able to produce 1 million tons of petrochemical products per year.

According to Hanung, the project will cost as much as US$5 billion.

To assist with the project, Pertamina has signed a memorandum of understanding (MoU) with multinational petrochemical companies SK Global Chemical, PTT Global Chemical and Mitsubishi Corporation.

Hanung noted that within four months of signing the MoU, Pertamina will select one of these three companies that best meets its criteria, especially in the field of technology and finances, to be its joint-venture partner in the naphtha-cracker development.

"The Naphtha Cracker refinery is scheduled to operate in 2017 with an annual production of 250,000 tons of ethylene, 400,000 tons of polyethylene, 350,000 tons of polypropylene and 200,000 tons of PVC," he said.

According to him, Pertamina and its chosen partner will conduct a feasibility study that will be completed by the end of 2013.

"In this partnership, Pertamina will have, at least, a 51-percent share in the joint venture," Hanung remarked, adding that Pertamina has gained full support from the government to realise this project as part of its effort to reduce the dependence of national industries on imported petrochemicals.

Current imports of petrochemical products are estimated to be around US$5 billion per year, but Pertamina has so far supplied about 10 percent of the total national petrochemical demand.

Following the successful operation of the Naphtha Cracker refinery, Pertamina will set itself a target to control 30 percent of the market share in 2017 and 80 percent in 2025.

"With the support of sufficient raw materials from Indonesian soil, we are certain that the target can be achieved," Hanung said.

Further, he pointed out that Pertamina has also cooperated with Mitsubishi Corporation to develop an integrated petrochemical facility in Indonesia.

The partnership with Mitsubishi is also expected to support Pertamina`s refinery operation and will help strengthen the company`s leading position in the domestic petrochemical market.

Mitsubishi Corporation is a globally integrated business enterprise that develops and operates businesses across virtually every industry including industrial finance, energy, metals, machinery, chemicals, foodstuff and environmental business.

Meanwhile, Pertamina`s President Karen Agustiawan noted in a statement earlier this month that the partnership will create an opportunity for the state oil and gas company to control the domestic petrochemical market.

Karen said Pertamina is set to be the main player in the petrochemical industry in Indonesia.

With the country`s expanding economy, Karen has predicted that demand for petrochemical products will continue to increase.

"This is good for Pertamina and SK Global Chemical, especially in meeting domestic demand for petrochemical products, to reduce dependence on imports," she stated.

SK Global Chemical is a big petrochemical producer in Asia, operating olefin, aromatic-polymer and performance-chemical industries.

Karen stressed that Indonesia`s production of petrochemicals is not yet sufficient to feed the downstream industries for which the country has to spend US$5 billion on imports of petrochemical materials per year.

Meanwhile, Pertamina Director Chrisna Damayanto said Pertamina and SK Global will develop a petrochemical industry worth US$4 billion in Indonesia.

The factory to be completed in 2017 will produce 1 million tons of petrochemical materials per year, Chrisna noted.

Cooperation between Pertamina and SK Global Chemical began with a number of projects such as the built-in cooperation with SK Innovative, the parent company of SK Global Chemical. Among the projects in the pipeline is the development of a Lube Base Oil plant in Dumai as a joint venture with Patra SK.(*)

Reporter: Otniel tamindael
Editor: Heru Purwanto
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