Pertamina to build petrochemical plant at Balongan

State oil and gas firm PT Pertamina plans to build a petrochemical plant that produces polyethylene and polypropylene with an annual capacity of 250,000 tons with an investment of US$300 million this year, Kontan reported Tuesday.

Vice President communication Pertamina Anang Rizkani Noor the plant would be built next to the Balongan refinery in Indramayu, West Java, which also produce both products at an annual capacity of 250,000 tons

The development of the new plant will be completed in 2011, he said.

Meanwhile, Secretary General of the Indonesian Association for Plastics and Olefin Industry (Inaplas) Budi Soesanto Sadiman said that feasibility study on the project was completed in December 2008, which means that the plant will start operation in 2011.

According to Budi, Pertamina is likely to team up with PT Polytama Propindo, which currently buys all Pertamina's polyethylene and polypropylene products.

?The other option is that the project is to be wholly owned by either Pertamina or Polytama. Negotiation on this is in progress,? he said.

According to him, the plant will be constructed by Japan's Toyo Engineering and PT Rekayasa Industri. (*)