Indonesia Develop Bintuni Bay Industrial Zones for the Petrochemical Industry

Indonesian government has received a number of investment plans from foreign investor in Bintuni industrial estates, West Papua - Photo by Industry Ministry

JAKARTA (TheInsiderStories) – Indonesian government boost the development of the Bintuni Bay industrial Zones in West Papua to produce petrochemical products, said one senior official in the Market Sounding for the investors on Monday (24/9). The steps to be taken are through the Public Private Partnerships (PPP) scheme.

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 area as well, in cooperation with an investor from China. Other company, South Korea’s LG International Corp., join with its local partner PT Duta Firza has announced to develop petrochemical plant in the West Papua.

Minister of Industry Airlangga Hartarto said that the government will focusing the Bintuni Bay as an area for the development of the petrochemical industry. This industrial area will play an important role in advancing industry in Indonesia, including deepening its manufacturing structure.

The development of the Bintuni Bay is also in line with the government’s priority program in spurring infrastructure development and industrial growth outside Java so that an inclusive economic equality occurs.

He ensured, that the Bintuni Bay has a big prospect for the development of industrial zones cause has potential of natural resources. The Bintuni Bay Region is estimated to have 23.7 trillion cubic feet of natural gas reserves.

The petrochemical plant that will be located in the Bintuni Bay industrial areas will later become one of the regional sources of income and become the anchor for the growth of other downstream factories. Based on the analysis of supply and demand, methanol is a viable product to be used as the first stage anchor industry.

The initial development plan for Teluk Bintuni industrial area is 50 hectares of the 200 hectares of land to be acquired. Of the 50 hectares area, an anchor industry, will be developed in the form of a methanol plant with the support of commitment to gas availability by BP Tangguh Phase I of 90 million standard cubic feet per day (MMSCFD) in 2021 and Phase II at 90 MMSCFD in 2026.

Meanwhile, the remaining land reserves can be used for Phase III of 176 MMSCFD from Genting Oil and other potential industries that can be developed.

“The total capital expenditure value of the development of the industrial estate is estimated at Rp1.7 trillion (US$117.24 million),” said Hartarto.

He continues, the methanol product will be used to meet domestic needs. Until 2021, Hartarto predicts the need for methanol in Indonesia to reach 871,000 tons. Currently, the supply is only from the production of PT Kaltim Methanol Indonesia with total amounts of 330,000 tons per year.

The minister hopes that the petrochemical industrial zone in Bintuni Bay will develop like the petrochemical industry area which has been growing rapidly at this time. “For example, the petrochemical industry in Bontang, East Kalimantan, which is the first petrochemical industry cluster that has been running for more than 30 years,” he adds.

Until now, there have been five petrochemical industries located in the East Kalimantan Industrial Estate region by producing various commodities, including ammonia, urea, methanol and ammonium nitrate.

The industry ministry noted that the chemical industry is one of the main contributors to gross domestic products at 1.73 percent or worth Rp236 trillion in 2017. The petrochemical industry is one of the important raw material producers for other industrial sectors. In addition, the growth of the chemical industry reached 3.48 percent with an increase in investment value reaching Rp42.2 trillion.

US$1: Rp14,500