PTTGC to invest in US$5bn Java complex

The SET-listed PTT Global Chemical Plc (PTTGC) yesterday signed a memorandum of understanding with Indonesia's national oil company, PT Pertamina (Persero), to invest jointly in a US$5-billion integrated oil refinery and chemical complex on Java.

"We're confident that a partnership between PTTGC and Pertamina in a petrochemical complex will be mutually beneficial as it reflects the shared strategic intent of both companies," said Anon Sirisaengtaksin, chief executive of PTTGC, majority-owned by giant PTT Plc.

He said PTTGC plans to diversify its business into downstream specialties and green chemicals.

More details are not yet available, but an official agreement is expected to be signed by the two in April.

Pertamina chief executive Karen Agustiawan said the partnership will provide an opportunity to increase Pertamina's refinery economics and to lead the domestic petrochemicals market.

The link-up between these two Southeast Asian national champions will also include collaboration in areas such as marketing, product research and development.

"Petrochemicals are one of Pertamina's core growth pillars to achieve its 2025 vision as a World Class Energy and Asian Energy Champion. Pertamina is serious about this partnership and the Indonesian authorities are showing strong support towards Pertamina," said Ms Agustiawan.

"As Indonesia's economy continues to grow strongly, so does demand for petrochemicals. Stable and cost-effective domestic supply is needed to encourage companies to invest in new manufacturing industries in Indonesia, creating jobs and spurring economic growth."

She said Pertamina plans to become Indonesia's leading petrochemical manufacturing and marketing player, providing Indonesian industry with reliable and cost-effective supply.

Pertamina plans to integrate five oil refineries with petrochemicals.

Shares of PTTGC closed yesterday on the SET at 66 baht, down 1.25 baht, in trade worth 697 million baht.

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Writer: Yuthana Praiwan
Position: Business Reporter