Indonesia’s largest integrated petrochemical producer, Chandra Asri Petrochemical (CAP), has signed an agreement with Univation Technologies to license the US company’s Unipol PE process for a 400,000 t/y plant to be built in Cilegon, Banten. The plant will produce HDPE, LLDPE and metallocene LLDPE, sourcing ethylene feedstock from the site’s naphtha cracker, which has been expanded by 43% to 860,000 t/y. CAP said the project is in line with its strategy of pursuing vertical integration and will add value to the plant’s excess ethylene, which is currently sold on the merchant market.

The Jakarta-based company already licenses Unipol technology for a line producing 200,000 t/y of LLDPE and HDPE resins. Total PE capacity at Cilegon is currently 336,000 t/y. CAP is working on the process design package and a final investment decision is expected by mid-2017.

The new plant will help increase Indonesia’s PE supply, which currently falls short of meeting domestic demand. CAP said the country’s PE demand is estimated at 1.4 million t/y and growing in line with GDP. The World Bank puts Indonesia’s GDP growth at 4.8% in 2015 and is forecasting 5.1% in 2016, and 5.3% in 2017.

CAP is the country’s only naphtha cracker operator and the sole domestic producer of styrene and butadiene.