Indonesië: petrochemical producer Chandra Asri signs MOU with Vopak

Indonesian petrochemical producer Chandra Asri in Cilegon is eyeing a foothold in the lucrative LPG market following the signing of a Memorandum of Understanding (MOU) in February 2011 with tank operator Vopak for the construction of an LPG terminal in the country. Construction is scheduled to begin 2011 and operations are expected to start in 2014.

The LPG terminal project is a strategic development for the olefins plant as it will support feedstock diversification, with Chandra Asri becoming able to swing more quickly to utilizing LPG as an alternative cracking feedstock to naphtha. Once it is built, Chandra Asri hopes that LPG will account for 10-15 per cent or 170,000-255,000 mt of its 1.7 million mt/year feedstock consumption, which is primarily naphtha at present.

Indonesia unveiled its plan to persuade people to switch from kerosene to LPG as a cooking fuel in 2006, and since then domestic demand for LPG has soared. With an estimated population of 230 million, LPG demand in Indonesia soared 42 per cent to 4.3 million mt in 2010 from 3 million mt in 2009, according to earlier reports. By 2013, demand is expected to swell to more than 5 million mt/year.

With domestic production accounting for just over 2 million mt, the country is a net importer and one of the biggest buyers of LPG in Asia. State-owned oil and gas company Pertamina has storage projects planned or in the process of being built. Now independent players are also jumping in to the fray to capitalize on opportunities offered through the growth of the LPG industry.

Chandra Asri's joint venture with Vopak calls for the construction of at least two LPG tanks, each with a storage capacity of 40,000 mt.