Following a Memorandum of Understanding in October 2018, Taiwan’s CPC and Indonesia’s Pertamina have now signed a Head of Agreement (HoA) to develop a petrochemical complex in Balongan, West Java. The move follows the completion of a feasibility study last year.

“This project is an important milestone to strengthen the petrochemical business portfolio so that within the next 10 years Pertamina is expected to become a major player in the petrochemical business in the Asia-Pacific region,” said Pertamina’s president director Nicke Widyawati.

The companies will invest $8 billion in the facility, which will be built at Pertamina’s oil refinery and centered on a cracker producing 1 million t/y ethylene. The complex is scheduled to go on stream in 2026. Pertamina and CPC are reported to each be taking a 45% stake in the venture, with the remainder reserved for potential participants.

Confirming the venture’s tax holiday, the Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia said the project is one of Indonesia’s priorities and fully supported by the government.

Pertamina was also planning to develop its Cilacap refinery in central Java in partnership with Saudi Aramco under an agreement signed in 2016. However, it said late last month that it would pursue the project independently.

The Indonesian state-owned energy group company is also developing another project at Tuban with Russia’s Rosneft. Pertamina will own 55% of the joint venture to be called PT Pertamina Rosneft Pengolahan dan Petrokimia Indonesia. The partners plan to take a final investment decision next year.

Plans are for the petrochemicals complex to produce more than 1 million t/y of ethylene and 1.3 million t/y of aromatics with startup scheduled for 2025.