PT Chandra Asri Petrochemical Tbk (TPIA) is partnering with Vopak Asia Pte Ltd, Singapore to build a US$ 150 million Liquefied Petroleum Gas (LPG) terminal in Cilegon, Banten. Erwin Ciputra, President Director of Chandra Asri Petrochemical Tbk, said that the development of the terminal will support company’s efforts to diversify raw materials.
Chandra Asri’s Olefin plant requires 1.7 million tons of naphthalene raw material per year. If operated, the plant will use LPG as alternative raw material which will take off much as 10-15 percent out of the total demand.
"Besides alternative raw materials to naphthalene, LPG supply from this terminal can be used as an energy source for the Chandra Asri plant’s production and operational activities," said Erwin.
The LPG terminal can also be used to distribute LPG to other industry and business sectors. LPG supply, particularly in Banten will be met.
Currently, Chandra Asri is reviewing technical aspects, environmental feasibility, location and permits required to build the LPG terminal. Construction of the terminal will start by end of 2011, and will be operational in 2014.
The terminal development is a part of the strategic plans of Chandra Asri for business and production capacity expansion. Currently, the company is conducting a "de-bottlenecking" program in polypropylene production by adding new machines to increase production capacity from 360 thousand tons to 480 thousand tons per year. The company invested Rp 300 billion on the project which will be operational in April 2011.
Chandra Asri also plans to increase ethylene production from 600 thousand tons to 1 million tons per year, and polyethylene from 320 thousand tons to 540 thousand tons within the next three to five years. To connect the petrochemical production chain from upstream to downstream, the company will build the first butadiene plant in Indonesia in June 2011. Construction is expected to be done by 2013.
"LPG terminal development is one of our efforts in supporting business expansion," added Erwin.
Raw material problem is also the concern of PT Titan Petrokimia Nusantara Tbk (PFNI). Titan imports naphthalene and ethylene raw materials from the Middle East, although raw material imports from outside of the ASEAN is levied five percent.
Bambang Budiharja, Director of Titan, said that in Southeast Asia, Titan usually buys ethylene from Malaysia and Singapore. Titan’s parent company in Malaysia sends raw materials to Indonesia.
"However, due to supply difficulty, the plant in Malaysia is only able to produce to meet production demand there. Similarly, Singapore cannot send raw materials due to supply difficulty," he said.
Abdul Malik
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