The partners have signed a Letter of Intent (LOI) to explore storage opportunities in supply networks to help grow existing petrochemical value chains and lay the foundations for an expanded industrial cluster in Cilegon, Banten province.

The finalization of the LOI and the establishment of a joint venture company is subject to final terms and conditions, including customary regulatory and shareholder approvals.

Chandra Asri president director and CEO Erwin Ciputra said: "We look forward to productive discussions with Vopak to jointly explore growing our existing jetty and tank farm operations, with two key strategic objectives: firstly to develop a new jetty and tank farm line of business to serve new third-party customers; and secondly to prepare for the investment and construction of the supporting infrastructure of our second petrochemical complex.”

He added: “We strongly believe in the growth potential of the petrochemical industry in Indonesia, and this initiative marks another step forward in that direction to solidify our business scale and reach, to serve the needs of our customers and the domestic market.”

Vopak added that the potential partnership will enable it to invest further in its industrial terminals business in Indonesia, which it has earmarked as one of its growth focus areas. The company already jointly owns and operates an oil terminal in Jakarta (49% ownership) and a chemicals terminal in Merak (95% ownership).

Last month, Vopak announced that it had formed a 50:50 joint venture with BlackRock's Global Energy & Power Infrastructure Fund to buy three industrial terminals in Texas and Louisiana, USA, from Dow for $620 million. The transaction is expected to close by the end of this year.

Author: Elaine Burridge, Freelance Journalist