Pertamina Develops Olefin Project to Support State’s Foreign Exchange Reserves

Jakarta, September 20, 2021 – PT Pertamina (Persero) is fully committed to government assignments of completing refinery and petrochemical mega projects. One of the developments focuses is the Petrochemical industry, namely the PT Trans Pacific Petrochemical Indotama (PT TPPI) refinery located in Tuban Regency, East Java. The refinery is targeted to become the largest petrochemical producer in Southeast Asia.

Following the direction of the President of the Republic of Indonesia, Joko Widodo, the handover of the TPPI refinery to Pertamina, as one of the largest refineries in Indonesia, can be operated integratively. As a petrochemical process plant, the TPPI Refinery can produce aromatic products, including para-xylene, ortho-xylene, gasoline, toluene, heavy aromatics. Moreover, it can also produce fuel oil such as; Premium, Pertamax, LPG, diesel, and kerosene.

The President also assessed that the TPPI refinery under Pertamina optimizes the TPPI refinery area. It would have the potential to create state foreign exchange reserves of up to US$4.9 billion or around Rp56 trillion. Thus, the TPPI Petrochemical factory’s management will create energy security by substituting imported petrochemical products. It has important value in facing the state’s challenges over the last few decades.

To implement the President’s wish, Pertamina moved quickly and ensured that the TPPI refinery development project kept running. After the acquisition of PT Trans Pacific Petrochemical Indotama (TPPI) at the end of 2019, Pertamina, through Subholding Refining & Petrochemical, PT Refinery Pertamina Internasional (PT KPI), swiftly prepares the construction of olefin and aromatic production facilities in the TPPI area, Tuban Regency, East Java.

TPPI is currently constructing an Olefin and Aromatic production facility known as the Olefin Complex Development Project (OCDP) in the TPPI refinery area, Tuban Regency, East Java. At TPPI, two development and construction projects are currently being implemented by Pertamina. First, the Revamping Aromatic project. This project will increase petrochemical production in Paraxylene from 600 thousand tons to 780 thousand tons per year. It is targeted to be completed in 2022.
The second, the New Olefin Project. This project includes the construction of a Naphtha Cracker, including downstream units with Polyethylene (PE) products of 1 million tons per year and Polypropylene (PP) 600 thousand tons per year. It also is targeted to be completed in 2024.

Subholding Refinery & Petrochemical, openly invite world-class companies with experience in Olefin and Petrochemical development to become strategic partners in building Olefin and Aromatic Production facilities in the country.

In early September 2021, the committee announced the tender results were based on the stages and processes following the Tender document and the Guidelines for the Procurement of Goods and Services applicable at Pertamina. In the future, the process will continue until the TPPI Olefin refinery construction project can be completed properly according to the latest plan.

“The entire TPPI refinery development tender process has been carried out transparently and in accordance with applicable procurement procedures, and there is no intervention from uninvolved parties,” said Ifki Sukarya, Corporate Secretary of Subholding Refining & Petrochemical.

According to him, this tender process was carried out by Pertamina with assistance from the Junior Attorney General Intelligence team, Criminal Investigation Agency of the Indonesian National Police, Indonesia’s National Government Internal Auditor (BPKP), and also consulted with National Public Procurement Agency (LKPP), to make very well-maintained governance. Pertamina has evaluated following the terms and conditions stated in the Prequalification Document.

In the construction of the petrochemical plant, Pertamina ensures the absorption of domestic components is following the minimum target set, namely 30%, both through goods and services, including local workers to contribute to the project operations.