Lotte Chemical Titan, a subsidiary of the South Korean Lotte group based in Kuala Lumpur, Malaysia, has broken ground for its planned 1 million t/y steam cracker and derivatives project in Cilegon, Banten in Indonesia’s West Java.

Construction work on the more than $3.5 billion project is slated to begin sometime this year or early next year, with completion targeted for 2023. Although naptha will be the principal feedstock, the Korean group said the facility will have “some flexibility” for cracking LPG.

The new cracker will be Lotte’s second in Indonesia. Most of the ethylene produced at Cilegon, Banten will feed a 450,000 t/y polyethylene plant already operating at the site.  Having a cracker at the same site will reduce the plant’s exposure to fluctuating feedstock prices and simplify logistics.

Lotte also operates two crackers in Malaysia.  The only other cracker currently on stream in Indonesia is Chandra Asri's 86,0000 t/y facility, which is in the process of being expanded to 900 000 t/y by 2020.

With the start-up of the new complex, Lotte also plans to start producing PP in Indonesia. The Korean group already operates three PP plants downstream of its two Malaysian crackers.

According to reports, Indonesia is currently only at 36% self-sufficiency in the ethylene chain and is a net importer of ethylene derivatives. When it has reached full run, Lotte’s new cracker is expected to help raise the country’s ethylene self-sufficiency to more than 50%.