A third partner will be sought next year for a joint venture of SET-listed PTT Global Chemical Plc (PTTGC) and Indonesia's Pertamina in building an olefin cracker on Java as part of their US$4-billion petrochemical complex.
Pertamina (Persero), the Indonesian national energy company, and PTTGC signed a marketing and trading agreement yesterday to merge and expand their petrochemical sales in Indonesia.
The latest agreement, which is still subject to further regulatory approvals within the first quarter of 2014, will lead to the establishment of a joint venture in Indonesia where Pertamina holds 51% and PTTGC 49%.
The third partner will be allowed to join in the next stage, but ownership has yet to be finalised, said Bowon Vongsinudom, president and chief executive of Thailand's largest petrochemical producer.
Yesterday's agreement followed a manufacturing joint venture _ heads of agreement that was signed in Jakarta last week.
Mr Bowon said the joint venture, which is unnamed as yet, will operate the cracker with an ethylene capacity of 1 million tonnes a year plus another 550,000 tonnes of propylene.
The plant is slated for operation in 2018.
In the future, PTTGC and Pertamina will look at the possibility of producing other products such as aromatics and high- and low-density polyolefins, said Mr Bowon.
"We have to study in detail the whole supply chain of the petrochemical industry in the Indonesian market before making the decision," he said.
The olefin cracker will act as a substitute for imports of petrochemical products into Indonesia. Last year the country imported 5 billion baht worth of petrochemical products.
Shares of PTTGC closed yesterday on the Stock Exchange of Thailand at 78 baht, up 1.25 baht, in trade worth 454.69 million baht.