TPPI delays funding $2.5b project

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)