Chandra Asri, BP Singapore team up on refinery project
Thursday, December 18 2014 - 12:44 AM WIB
CAP said in a statement Wednesday that it had signed a memorandum of understanding (MoU) with BP to develop a refinery in Cilegon. The condensate splitter refinery will turn oil condensate into products such as naphtha, used as petrochemical feedstock.
The statement said that the refinery was intended to process up to 100,000 barrels of feedstock per day.
?CAP and BP have been conducting a study on the condensate splitter, which aligns with CAP?s strategic plan to move toward vertical integration, and would extend BP?s businesses in Indonesia? the statement said.
The statement further said that the project was designed to reduce domestic reliance on heavy imports of naphtha. In addition, CAP also uses imported naphtha as its main raw material to produce olefins.
CAP corporate secretary Suryandi told The Jakarta Post over the phone that naphtha output from the project would be used to feed the company?s crackers, and further was expected to help the company ease its reliance on the petrochemical raw material.
?We import 100 percent of our naphtha,? Suryandi said. ?The project is expected to supply 40 to 50 percent of the naphtha needed for our production."
Suryandi said that the company was still calculating how much investment was needed for the condensate splitter and the stake the company would hold in the joint venture that would later be formed with BP Singapore, adding that it might be too early for the company to disclose when it would start construction of the refinery.
?We, however, target the facility starting operation in 2019,? he added.
CAP made US$13.18 million in net profit in the first nine months of 2014, a significant improvement compared to the $6.98 million net loss made in the same period a year earlier. The company?s net sales increased by about 7 percent from $1.81 billion during the January to September period last year to $1.94 million in the same period this year.
CAP is part of diversified listed company Barito Pacific owned by local tycoon Prajogo Pangestu and is Indonesia?s largest integrated petrochemical company producing olefins and polyolefins. It is the only producer operating a naphtha cracker, and is the sole domestic producer of styrene monomer and butadiene usually used to produce synthetic rubber and plastics.
CAP is also looking to. expand its naphtha cracker facility, increasing productivity from 600,000 kilotons of ethylene to 860,000 kilotons. The company has ?secured $542 million in loans through bank syndication earlier this year to support expanding its cracker, which had absorbed $380 million investment and was initially scheduled for completion later this year. (*)