Thailand-based PTT Global Chemical Public Company Limited, the chemical flagship of the giant PTT Group, signed an agreement on Tuesday with state-owned PT Pertamina on a joint venture to develop a petrochemical complex in Plaju, South Sumatra. “Plaju already belongs to Pertamina, so there’s no need for land acquisition,” said the Pertamina Director of Processing, Chrisna Damayanto.
Under the agreement, Pertamina will hold a 51 percent stake while PTT Global Chemical will have the remaining 49 percent. The plant is expected to be completed by 2016. The companies will jointly develop the petrochemical complex on a 450-hectare-site in Plaju that will house, among other facilities, a naphtha cracker with a production capacity of 1 million tons per year, Chrisna said.
Chrisna said that Pertamina hopes to control 30% of domestic petrochemical market with the construction of this complex. In 2018, petrochemical market in the country is predicted to reach US$30 billion. Up to now, domestic petrochemical production is not able to fulfill national needs. This is why the company must import around US$5 billion per year. A joint venture of Pertamina and PTT Global Chemical Company Ltd (PTT GC) will build the petrochemical complex with investment value reaching to US$5 billion.
The company announced on Monday that it had obtained loans amounting to $265 million from various banks, namely Bangkok Bank PCL Jakarta branch, the Siam Commercial Bank PCL, Indonesia Eximbank, DBS Bank Ltd., and Deutsche Bank AG Singapore branch.
Chandra Asri is currently 59.35 percent owned by PT Barito Pacific, which is controlled by local tycoon Prajogo Pangestu, 30.12 percent by Thai SCG Chemicals Company Limited and the remaining stock is held by the public. The company is planning to increase the production capacity of ethylene to 860,000 kilotons per year from the previous 600,000 kilotons.