Ferrostaal, Chandra to build $1.8b petrochemical plant

German petrochemical company Ferrostaal Industrial Projects GmbH and IDX-listed PT Chandra Asri Petrochemical plan to build a methanol-based olefin production complex in Teluk Bintuni in West Papua , with a total investment amounting to US$1.89 billion, The Jakarta Post reported on Friday.

The two companies signed a memorandum of understanding (MoU) in Jakarta on Thursday on joint-feasibility study for the development of the petrochemical plant. The petrochemical complex is expected to produce up to 400,000 tons of polypropylene and 175,000 tons of ethylene annually.

However, the project will be realized only if the feasibility study shows positive results, and receives assurance from the Energy and Mineral Resources Ministry on the long term gas supply for the plant.

Ferrostaal and Chandra Asri will cooperate with the Industry Ministry on the feasibility studies.

?We are still on the agreement on feasibility studies. [What come next] will depend on whether we will get the gas allocation,? Chandra Asri president director Erwin Ciputra said after the agreement signing at the Industry Ministry.

Gas supply for the complex is expected to be provided by the Tangguh liquefied natural gas (LNG) plant also in West Papua. (*)