JAKARTA (TheInsiderStories) – Malaysian-based Genting Energy Ltd, which is currently developing a gas block in Bintuni, West Papua, has unveiled its plan to develop a petrochemical complex in the Bintuni area as well, in cooperation with an investor from China. The company’s plan has been conveyed to the Industry Ministry.
The planned project will be separate from the Indonesian government plan to develop a gas-based petrochemical industrial complex in Bintuni area, one that will process the natural gas produced by Tangguh LNG project, developed by BP.
Wandy Wanto, deputy general manager of Genting Energy, told reporters after meeting with the Industry Ministry on Wednesday (15/02) that the company supports the government’s plan to develop the downstream petrochemical project, particularly since it will support the company’s giant Kasuri gas block in Bintuni.
The Kasuri Block, which covers an area of 3,534 sq km onshore Bomberai Peninsula in West Papua, is immediately adjacent to the offshore Tangguh Gasfields.
Genting was awarded the Kasuri block by the Indonesian government in 2008. A major gas discovery was made in 2011 following intensified exploration works.
The gas reserves in Kasuri Block reach around 1.8 trillion cubic feet (TCF) with gas production potential of 285 million standard cubic feet per day (mmscfd); of this, around 170 mmscfd is to be allocated to the Bintuni petrochemical industry. The Malaysian oil and gas company is currently seeking a partner to develop the block, following the discovery of huge oil reserves.
Petrochina, a Chinese oil and gas company, has earlier indicated that their company is interested in acquiring a participating interest in the Kasuri Block. However, it is not clear whether Petrochina will also be taking part in the downstream project.
Wandy explained the investor from China is interested in investing between US$1.5-2 billion to extract methanol, a raw material used to produce polyethylene, polypropylene, and other products. “Thus, we are also bringing in an investor to develop the downstream sector, which promises to be good for Indonesia,” Wandy said.
He indicated that if things go ahead as planned, the petrochemical plant could start up operations as soon as 2020.
Meanwhile, Director General for Chemicals, Textiles and Miscellaneous Industries at the Industry Ministry Achmad Sigit Dwiwahjono commented that the Industry Ministry supports the company’s plan, as it is in line with the government’s own drive to develop petrochemical industry in this country.
Indonesia currently still depends on imported petrochemicals, due to limited capacity of domestic producers, led by PT Chandra Asri Petrochemical Tbk (IDX:TPIA). Sigit Widiwahjono said Indonesia currently imports around Rp220 trillion of petrochemical products, of which 70 per cent are polypropylene and polyethylene-based.