Government pledges assurance to investors to realize plans for petrochemical

(26-8-2013)

Industry Minister has pledged government help for investors in order to realize plans to build a massive petrochemical complex in West Papua.

The Minister met with senior managers of German industrial giant Ferrostaal, which, together with Indonesia’s Chandra Asri, plans to build a US$2 bln petrochemical facility in Bintuni Bay, West Papua, but is waiting for assurances on natural gas supply, as per thejakartaglobe.com. Other companies, including South Korea’s LG International and state-owned fertilizer producer Pupuk Indonesia, plan to invest in Bintuni Bay, which could lead to the development of a US$7 billion petrochemical complex.

The proposed development is situated near the BP-operated Tangguh liquefied natural gas plant, which is currently undergoing a US$12 bln expansion to boost capacity by 50% from the present 7.6 miln tons of LNG available through existing facilities. Tangguh serves several fields that are estimated to have combined reserves of 14.4 trillion cubic feet. As per the Minister, Ferrostaal has already concluded a feasibility study on the project, which found “it would not be valid unless there is an assurance of natural gas supply.”