CPC to invest $300m in Indonesia

CPC to invest $300m in Indonesia

TAIPEI (Reuter): Taiwan's state-run Chinese Petroleum Corp. (CPC) said yesterday it has not changed its plan to invest US$300 million in a project that includes moving its currently closed No. 2 naphtha cracker to Indonesia.

A CPC executive denied a report in the Commercial Times newspaper yesterday that said CPC is likely to change its plan as the Indonesian government, which welcomed the investment, is not willing to open the Indonesian market to the project.

CPC would be forced to give up the project unless it conducted further negotiations with Indonesia, the paper added.

"The (Commercial Times) report made something out of nothing. We will go ahead as planned," Hseuh Jung-hui, head of CPC's Indonesia ad hoc committee, told Reuters. He did not elaborate.

Last August CPC announced plans to move its No. 2 cracker from the southern Taiwan city of Kaohsiung to Indonesia. Construction of the new cracker would begin in 1998, and would have an annual production capacity of 230,000 tons of ethylene, CPC said.

"We can't say when the plant will be completed or reach full capacity, but we think Indonesia's market demand will be very high and make for good business once the plant is completed," CPC spokesman Wang Chih-ming said then.

Wang added that CPC would use part of its investment to establish a petrochemical zone in Indonesia, which would mainly produce downstream petrochemical raw materials.

CPC's No. 2 cracker was shut down in April 1994 after the firm opened a fifth cracker. CPC closed its No. 1 cracker in 1990.

The third, fourth and fifth crackers have annual capacities of 230,000, 385,000 and 400,000 tons of ethylene, respectively.