Chandra Asri, BP to build US$75m plant
Chandra Asri, BP to build US$75m plant
JAKARTA (JP): British Petroleum (BP) and Chandra Asri,
Indonesia's first olefin producer, have agreed to jointly build
Southeast Asia's first polybutenes plant in Cilegon, West Java.
Both companies signed the memorandum of understanding
yesterday, agreeing to set up a 50:50 joint venture and invest
about US$75 million to build the proposed plant.
Chandra Asri's Chief Executive Officer Peter F. Gontha said
the joint venture would strengthen the country's petrochemical
industry, as the two competing companies had formed a synergy.
"This is a major step in the country's downstream
petrochemical industry, which before faced difficulties because
of high investment," he said after the signing.
Gontha said construction would start early next year and would
be completed by late 1999.
The plant would initially produce 45,000 tons of polybutenes a
year and would eventually produce 100,000 tons, he said.
BP would license its world-leading polybutene technology to
the project and Chandra Asri would provide Isobutylene, the
plant's feedstock, by pipeline, he said.
As production rises to meet demand growth, additional
feedstock would come from the proposed Salim-BP joint venture's
naphtha cracker, which is due on stream in the nearby Serang by
2001, he said.
He said the joint venture strengthened the relationship with
BP. Chandra Asri, which is also based in Cilegon, recently signed
a five-year ethylene supply agreement with PT PENI, in which BP
had a majority stake.
Meanwhile, BP Indonesia's chemicals developments director Jim
Hay said BP aimed to be Asia's market leader in polybutenes.
"Our investment in this joint venture reinforces BP's
commitment to the fast growing local and regional markets. And
Indonesia would be our first large-scale producer in the region,"
he said.
Hay said BP planned to have more projects with Chandra Asri,
including an ethyl acetate facility.
Polybutenes are widely used to make lubricating oil, as fuel
additives for two-stroke oils, for adhesives and sealants and in
the wire and cable industry.
The chemical is used as an additive for cleaner and less
polluting gasoline fuel and lubricants.
The joint venture believes rapid growth in regional demand in
polybutenes will result from environmental legislation
encouraging cleaner two-stroke fuels and lubricants, Gontha said.
(das)