Hasjim joins with British company to produce olefin

JAKARTA (JP): PT Trans-Pacific Petrochemical, an Indonesian- British joint venture, will establish an integrated olefin and aromatic center with a total annual production capacity of 2.2 million tons in Tuban, East Java, a reliable source said.

"PT Tirtamas Majutama, a subsidiary of Prima Comexindo Group, and Britain Trans Pacific Petrochemical have agreed to invest US$1.98 billion with composition of 10:90," the source at the Investment Coordinating Board told The Jakarta Post yesterday.

He elaborated that the planned plant will produce 275,000 tons of methane and pyrolysis fuel oil, 850,000 tons of ethylene and propylene, 225,000 tons of C4 component, 300,000 tons of benzene and toluene, 470,000 tons of paraxylene and A10 component and 100,000 tons of orthoxylene a year.

Prima Comexindo Group, which trades with countries in the Commonwealth of Independence States, is owned by Hasjim Djojohadikusumo.

The olefin plant, to be built on a 200-hectare area, will start trial operation in June 1999 and commercial production one year later. About 15 percent of the petrochemical production is slated to be exported.

The planned olefin plant will be the second mega project to produce petrochemicals used as raw materials for the production of fibers and plastics. PT Chandra Asri Petrochemical Center in Cilegon, West Java, started operation in May.

PT Chandra Asri is a joint venture of Siemen International Ltd., Stallione Co, Ltd., and Japan Indonesia Petrochemical Investment Corporation with a total investment of US$1.9 billion.

Another source was quoted by Republika as saying that President Soeharto has agreed on the establishment of the integrated aromatic and olefin plant in East Java.

Earlier reports said that State Minister of Investment Sanyoto Sastrowardoyo, who is also chairman of the Investment Coordinating Board, had disclosed that Indonesia still needs more olefin centers as the country's demand for olefin products, such as ethylene, propylene, polyethylene and polypropylene, would grow in the future.

Industrial data show that Indonesia needs some 600,000 tons of ethylene in 1996 while Chandra Asri's annual production capability is only 300,000 tons. In 1997 the demand for ethylene will rise to 760,000 tons.

Indonesia's propylene imports are projected to decline from 395,000 tons this year to 150,000 tons in 1999 after the operation of the East Java project.(kod)