Chandra Asri in JV with BP Singapore for preliminary study to develop condensate splitter project in Banten

19-Dec-14

Indonesia's petrochem major Chandra Asri Petrochemical (CAP) has inked an agreement with oil and gas firm BP Singapore Pte Ltd (BP) to follow up a preliminary study to develop a condensate splitter project in Banten. The condensate splitter refinery will turn oil condensate into products such as naphtha, and is intended to process up to 100,000 bpd of feedstock. This development is expected to help CAP halve its heavy reliance on imported raw materials by 2019. CAP corporate secretary informed The Jakarta Post that naphtha output from the project would be used to feed the company’s crackers, and further was expected to help the company ease its reliance on naphtha imports. Currently the company imports 100% naphtha requirement. The project is expected to supply 40-50% of the requirement. “CAP and BP have been conducting a study on the condensate splitter, which aligns with CAP’s strategic plan to move toward vertical integration, and would extend BP’s businesses in Indonesia,” a statement read, adding that the project was designed to reduce domestic reliance on heavy imports of naphtha. In addition, CAP also uses imported naphtha as its main raw material to produce olefins. The company is still calculating how much investment was needed for the condensate splitter and the stake the company would hold in the joint venture that would later be formed with BP Singapore, adding that it might be too early for the company to disclose when it would start construction of the refinery. However, CAP is targetting start up in 2019. CAP is also looking to expand its naphtha cracker facility, increasing productivity from 600,000 kilotons of ethylene to 860,000 kilotons. The company has secured $542 million in loans through bank syndication earlier this year to support expanding its cracker, which had absorbed $380 million investment and was initially scheduled for completion later this year.