TPPI delays funding $2.5b project

JAKARTA (JP): PT Trans-Pacific Petrochemical Indotama (TPPI) has delayed its permanent financing plan for a US$2.5 billion petrochemical project in Tuban, East Java.

TPPI's president, Hashim Djojohadikusumo, said that the delay was due in part to the current unsettled state of Asian financial markets.

The company was seeking "the optimum method" for maintaining its original project schedule as much as possible, while at the same time reducing near-term funding requirements.

"The goal is to bring these funding requirements better into line with our financing plans," he said. "It is not possible at this stage... to predict with certainty the effect on the project schedule, but our goal is to minimize delays."

He expected there would be positive news concerning the project in the near future.

According to TPPI, the project was 34 percent complete as of Nov. 30. Significant additional progress was anticipated over the next several months.

Hashim also emphasized that any decision to slow construction would be intended only to bring construction progress and financing plans into better alignment. There had been no cancellations of any construction contracts or subcontracts.

The project's sponsors, including Tirtamas Majutama, remained fully committed to the project and to its completion at the earliest practicable time, he said.

The TPPI facility would have an annual production capacity of over 3 million tons. The project was scheduled to be operational by mid 1999.

Shareholders of TPPI include Tirtamas with a 10 percent stake, Trans Pacific Petrochemical Ltd. (55 percent), Tuban Petrochemical Pte Ltd. (20 percent), Nissho Iwai Corporation (5 percent) and Itochu Corporation (5 percent). Koch Industries Inc. of the United States will take the remaining 5 percent. (hen)