Boston, MA -- (SBWIRE) -- 08/21/2012 -- The Indonesia Petrochemicals Report Q3 2012 examines the latest plans for the expansion of the country's growing polymer resins sector. However, we warn that declining oil production and a restricted refining base could undermine naphtha feedstock supplies.
Furthermore, this report also analyses many of the trends in the domestic and external markets and the impact of these trends on investment decisions and the way producers manage risk. We also examine the continued potential for domestic consumption growth at a time when supply is unable to keep pace with demand.
Whereas a number of South East Asian economies are braced for a period of stagnation over the next few quarters, BMI anticipates that Indonesia will power ahead to register relatively robust growth. At the same time, a prolonged global economic downturn could affect the archipelago's ability to realise its full growth potential, but exposure is limited relative to the rest of the region. We note that the government's urban development programmes, which include affordable housing and infrastructure, are unlikely to play a major role in petrochemicals consumption growth.
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Global majors are increasingly paying attention to Indonesia. In particular, South Korea's Honam Petrochemical Corporation is planning to invest up to US$5bn in a complex that would have a cracker with 1mn tonnes per annum (tpa) ethylene and 550,000tpa propylene capacity. Saudi Aramco is also studying an integrated refining and petrochemicals project under which it would construct a 300,000 barrels per day (b/d) refinery; the proposed configuration of downstream units has yet to be disclosed. Meanwhile, Thailand's Siam Cement Group (SCG) and PT Barito Pacific hope to raise US$500mn to finance the expansion of their Chandra Asri Petrochemical joint venture (JV). Under the expansion ethylene capacity would be raised from 600,000tpa to 1mn tpa, a new 100,000tpa butadiene extraction facility would be built and PE capacity would rise by 220,000tpa to 540,000tpa.
Over the last quarter BMI has revised the following forecasts/views:
- Kuwait Petroleum International (KPI) indicated in Q212 that it was examining a proposed 200,000-300,000b/d refining and integrated chemicals complex in Indonesia. The configuration of downstream units has not been announced and it is unlikely to come onstream before 2017.
- Having completed acquisitions in the purified tephthalic acid (PTA) and polyethylene terephthalate (PET) segment in Q212, Indorama Ventures is planning to invest in a new 300,000tpa plant to make polyester chips - due onstream in 2013 - in a bid to become a leading vertically integrated polyester value chain producer.
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