MoU signed to explore the potential development of a crude-to-petrochemicals complex in Balongan, Indonesia
Adnoc has announced that it has signed agreements with Indonesia’s Pertamina- a state-owned oil and gas corporation and Chandra Asri- a Jakarta-based petrochemical firm for the development of a petrochemical complex and supply of liquefied petrochemical gas (LPG).
The MoU was signed to explore the potential development of a crude-to-petrochemicals complex in Balongan, Indonesia as well as a sales agreement in which Adnoc will supply Pertamina with up to 528,000 MT of LPG by the end of 2020.
Adnoc’s MoU with Chandra Asri will focus on exploring the potential supply of naphtha that will be utilised as feedstock for the latter’s current and potential new cracker complex in Indonesia.
Dr Sultan bin Ahmad Sultan Al Jaber, Minister of State and Adnoc Group CEO signed the agreements with Nicke Widyawati- Pertamina’s president director and CEO, and Erwin Ciputra- Chandra Asri’s president director.
Commenting on the development, Dr Al Jaber said: “The agreements signed with Pertamina and Chandra Asri will potentially help Adnoc to secure additional in-market presence in one of Southeast Asia’s fastest-growing economies, enabling new domestic value-creation opportunities across the hydrocarbon chain.”
“Today’s announcement is a testament to the success of Adnoc’s international partnership strategy, our ability to consistently deliver innovative value-creation opportunities and the UAE’s strong ties with the Republic of Indonesia,” he added.
Meanwhile, Widyawati said that the agreements with Adnoc will strengthen Pertamina’s ability to carry out its national duty, while realising Indonesia’s energy security in a challenging and complex environment.
“We expect that both the potential refinery development at Balongan and the direct LPG supply will allow us to optimise Indonesia’s oil and gas value chain, better serve the domestic market through our vast distribution networks across the whole archipelago and access new opportunities to meet growing global demand for petrochemical products,” she added.
Ciputra said: “Chandra Asri is delighted to explore opportunities with Adnoc in the area of feedstock supply for our current and future petrochemical business. This is in line with our heritage and strategy of developing long-term, win-win partnerships as a growth partner; supporting our ongoing mission to contribute to Indonesia’s economic development.”
The potential crude to petrochemicals complex would build upon the ambitions outlined in the framework agreement signed by Adnoc and Pertamina in 2019, while the new Pertamina LPG sales agreement with Adnoc will allow for both FOB and CFR sales. This flexibility further supports Adnoc’s strategy to deliver more CFR cargos to its customers and build upon its trading and logistics capabilities.
Furthermore, Adnoc’s supply agreement with Chandra Asri is expected to further expand its reach in Indonesia and help lay the groundwork for other potential areas of collaboration between the two companies.