Indonesia's state-owned oil and gas firm, Pertamina, has selected Thailand's PTT Global Chemical (PTTGC) as its partner to build a petrochemical complex in Indonesia with an estimated cost of $5 billion.

The complex, consisting of a 1 million ton olefins plant and a downstream polymer facility, will start commercial production by 2017 and supply the Indonesian market, the Thai firm said in a statement.

Pertamina and PTTGC will sign a partnership agreement in April and aim to set up a joint venture this year, the statement said.

"The total cost of the project is expected to be around $5 billion with a 50-50 holding with Pertamina, and most of the money will be spent during 2015 to 2017," PTTGC Chief Executive Anon Sirisaengtaksin told Reuters.

PTTGC may invest $1.25 billion for its equity holding and the rest of the funding will come from borrowing, Anon said, adding that the final investment figure and shareholding structure will be decided later this year.

The two firms said in December they had signed a memorandum of understanding to study a joint investment in a petrochemical complex but gave no details.

The project will be the first large-scale petrochemical complex in Indonesia, PTTGC said, as the country moves to meet growing demand and reduce imports of petrochemical products.

It will also be PTTGC's first investment in Indonesia as it aims to expand overseas and especially in Southeast Asia.

PTTGC, 49% owned by Thailand's largest energy firm PTT, plans to invest $4.5 billion from 2013 to 2017 in capacity expansion and joint investments as it focuses on speciality chemicals and green products, which offer high margins.

PTTGC, Thailand's largest petrochemical firm, is also considering the possibility of jointly investing in a Malaysian petrochemical project with that country's state-run oil company Petronas. PTTGC has said it expects a decision on the project in the third quarter of 2013.