New Petrochemical Estate for West Papua
The Jakarta Post, Friday, March 16, 2012
Linda Yulisman, The Jakarta Post, Jakarta
The government plans to build a petrochemical industrial estate in
West Papua next year to help meet rising demand for petroleum-based
products and reduce dependency on imports, officials say.
Industry Minister MS Hidayat said on Thursday that a master plan was
being drafted and would soon be followed by a feasibility study.
“We have a potential space of 400 hectares there. The gas supply for
the industry can be sourced from the Tangguh field,” he told reporters
at his office in Jakarta.
The master plan, which maps out the infrastructure and funds required
for the development, should be completed by October, according to
Industry Ministry director general for industrial regions development
Dedi Mulyadi.
British Petroleum has already expressed an interest in investing in
the estate, he added.
Other investors submitting proposals include state-owned fertilizer
firm PT Pupuk Sriwijaya (Pusri) and foreign investors, including some
from South Korea, Japan and Germany, the ministry’s director general
for manufacturing-based industry Panggah Susanto said.
The investment needed for the project might total US$4.3 billion, with
$800 million spent on building a methanol plant, $500 million for a
polyprophylene plant, $2 billion for ammonia- and urea-fertilizer
plants, and $1 billion for building utilities and port facilities.
The ministry has consulted the Energy and Mineral Resources Ministry
(ESDM) over the necessary gas supply for the project.
“We have requested, to the ESDM, the gas and once there’s certainty
about the gas supply, we can start the project,” he said.
According to Industry Ministry estimates, the first phase of the
petrochemical industrial estate will require around 382 million
standard cubic feet per day (mmscfd) of gas to fuel two urea plants
with a total production capacity of 3,500 tons per day, two ammonia
plants with a production capacity of 2,000 tons per day and a methanol
plant. Meanwhile, the second phase of the project will need around 200
mmscfd of gas to develop a diesel plant.
“We should begin soon, as the gap between local production and
imported materials has been higher than consumption (of petrochemical
products) by industrial sectors, such as packaging and automotive
industry that continue to surge,” Panggah said.
Industry leaders have agreed that the development of an integrated
petrochemical industrial estate will help reduce production costs for
olefin, aromatic and fertilizers.
Overseas, as well as local, firms have geared up to realize investment
in the sector as demand for petrochemicals is predicted to rise in
line with the country’s economic growth.
In the next year, companies plan to invest about $26 billion in the industry.
