Indonesia’s largest integrated petrochemical company, Chandra Asri Petrochemical (CAP), will undertake a feasibility study to build and operate a second integrated chemical complex in the country.

The multi-billion dollar facility, which will be sited adjacent to its existing complex at Cilegon in Banten province, will comprise a 1 million t/y ethylene cracker and units for various downstream derivatives, sharing some of the existing common facilities.

The study, said CAP, fits its strategy to expand its petrochemical footprint in Indonesia to serve the growing domestic market, which has a burgeoning population of around 250 million and forecast annual GDP growth of more than 5%. Indonesia is structurally deficient in many petrochemical products and relies heavily on imports. For example, the country is expected to consume an estimated 3 million t of PE/PP in 2017, with imports likely to remain above 1.7 million t.

CAP will set up a new company to establish the second complex, and discussions are currently ongoing with various industry players. In addition, the group will discuss the availability of fiscal incentives with the relevant government authorities in order to accelerate the project.

PT Barito Pacific and its strategic partner, SCG Chemicals, are the majority shareholders in CAP, which is Indonesia’s sole naphtha cracker operator and producer of ethylene, styrene and butadiene. It is also the country’s largest producer of propylene and PP. CAP has a leading domestic share of 30-40%.

No further details were revealed about a timescale for the project or when the feasibility study will start.

The company is also due to make a final investment decision by mid-2017 on the construction of a PE plant in Cilegon. An agreement was signed last September with Univation Technologies to license the US company’s Unipol PE process for a 400,000 t/y plant producing HDPE, LLDPE and metallocene LLDPE.