Taiwan, local firms reach $300m deal

Taiwan, local firms reach $300m deal

TAIPEI (Reuter): Taiwan's state-run Chinese Petroleum Corp
CHIP.CN (CPC) said yesterday it will sign a contract on Dec. 17
with unnamed Indonesian counterparts to invest US$300 million in
a petrochemical zone in that country.

Part of the project will involve moving CPC's currently closed
No. 2 naphtha cracker to Indonesia from the southern city of
Kaohsiung, CPC spokeswoman Ho Li-chun said by telephone.

"We will sign the contract with our Indonesian counterparts in
the December meeting in Taipei," Ho said without elaborating.

CPC had earlier said it also planned to sign agreements on two
joint venture projects with Indonesian firms worth a combined
US$74.32 million at the Dec. 17 meeting.

CPC and Indonesian state-owned firms -- PTGC and Pertamina --
will jointly invest in a US$24.32 million plant to produce
asphalt and a US$50 million plant to produce lubricants.

Ho said CPC is seeking other Taiwanese and Indonesian firms to
partner in the petrochemical project which will manufacture
midstream and downstream petrochemical raw materials.

"It's only a hope, and we haven't finalized any agreements
yet," he said. Ho, who declined to name CPC's potential partners,
said substantial talks on cooperation will begin after the
contract is signed.

Union Petrochemical Corp (UPC) said it is among the firms
which are considering to coordinate investments in Indonesia with
CPC. "We are thinking of investing to produce plasticizers," a
senior UPC official said by telephone. A plasticizer makes
plastic more elastic.

"Many petrochemical firms are interested in Indonesia because
of its large population and high development potential," he said,
adding the company would wait for CPC to sign the contracts
before discussing the issue.

"I can say that a lot of firms have shown interest, but I can
also say that no one has made any kind of commitment."

The local Economic Daily News newspaper reported that Grand
Petrochemical, Taiwan Styrene Monomer and Taiwan Synthetic Rubber
are among the other Taiwanese firms that have shown interest in
CPC's project.

The firms either declined comment or could not be reached.

CPC's No.2 cracker was shut down in April last year after the
firm opened its No. 5 cracker. CPC closed its No. 1 cracker in
1990. The No. 3, No. 4 and No. 5 crackers have annual capacities
of 230,000, 385,000 and 400,000 tons of ethylene, respectively.
CPC has not announced the capacity of its Indonesia cracker.