Trans Pacific to revive Tuban olefins project

Trans Pacific to revive Tuban olefins project

SINGAPORE (Dow Jones): Indonesia's Trans Pacific Petrochemical Indotama, the joint venture behind the stalled $2.3 billion olefins project in Tuban, East Java, hopes to reach an agreement with interested investors by the end of March, and resume construction sometime in the second quarter of 2000.

According to a company official, who spoke to Dow Jones Newswires Thursday, "there are some serious investors in the project, one of whom is Asian."

"Once the new investors are in place, we'll make an announcement, which shouldn't be too far in the future," he added.

Construction on the integrated olefins/aromatics project was halted in late 1997 in the wake of the Asian financial crisis, when the project was 45 percent complete.

This was despite Tirtamas Majutama receiving a Rp 1.63 trillion (US$226 million) bridging loan from local banks in July 1997 to keep the project afloat.

According to the Indonesian Bank Restructuring Agency, only Rp 600 billion of the total loan was channeled to TPPI.

TPPI is a joint venture between Indonesia's Tirtamas Group, which holds 65 percent through subsidiaries Trans Pacific Petrochemical and Tirtamas Majutama; Tuban Petrochemical, a Siam Cement PCL subsidiary, with 20 percent; and Japan's Itochu Corp. and Nissho Iwai Corp., and Koch Industries Inc. of the U.S., each with 5 percent.