Exclusive: PTTGC mulls cracker in US, advances in Indonesia, pulls out of Malaysian JV

11:08 AM | May 14, 2014 | Natasha Alperowicz in Bangkok

PTT Global Chemical (PTTGC; Bangkok), Thailand’s largest chemicals player, is studying plans for a possible cracker and derivatives project in the United States and is advancing with a previously announced, $4–5 billion petrochemicals joint venture in Indonesia. However, the company will not pursue plans for a jv with Petronas as part of the $20-billion Refinery and Petrochemical Integrated Development (Rapid) project at Pengerang, Johor State, Malaysia.
Bowon Vongsinudom, president and CEO of PTTGC, in an exclusive interview with CW at Bangkok today, outlined PTTGC’s plans and aspirations, which include significantly growing revenue in the medium term, lifting Ebitda, and having a larger asset base outside Thailand, where most of the company’s manufacturing operations are currently based. The interview occurred ahead of the Asia Petrochemical Industry Conference taking place at Pattaya, Thailand, in the next few days,
Bowon tells CW that PTTGC is in early discussions with potential partners for a cracker and resins project in the northern United States, which would use shale gas as feedstock. The company may link with some Japanese players in such a venture, he says. Shin-Etsu recently said that it will build a cracker project in the United States, but Bowon says PTTGC is not in discussions with Shin-Etsu for the project.
Separately, PTTGC and Pertamina plan to form a marketing joint venture in June or July, ahead of establishing a manufacturing jv. The companies signed a heads of agreement last year to form the jv's with a target date for completing the manufacturing alliance in 2018. The completion date will probably slip, Bowon says. He tells CW that Balongan in West Java Province, Indonesia, the site of Pertamina’s existing refinery, will probably be the location of the future jv. Pertamina, possibly with partners, will build an additional refinery at the site with throughput of some 180–300,000 bbl/day, which would supply feedstock to the planned petrochemicals complex. The complex will be designed to produce a combined 1 million m.t./year of ethylene and propylene. Downstream, the jv will produce high-density polyethylene (PE), linear low-density PE, and monoethylene glycol, Bowon tells CW. Pertamina will hold a 51% stake, and PTTGC will have the balance. The partners were also considering Plaju, South Sumatra Province, Indonesia, where another of Pertamina’s refinery is based, as a possible site for the project.

PTTGC is also studying a possible alliance with Sinochem to produce downstream petrochemicals in China. The product slate may include polyurethanes, Bowon says. The project is at an early stage, and the partners have not yet discussed where it is likely to be based.
Separately, PTTGC will not go ahead with the Rapid project in Malaysia. PTTGC and Petronas signed an agreement to develop a value-added specialty chemicals complex as part of the complex. “The Rapid project did not meet our investment criteria and is unlikely to go ahead," Bowon says. The partners had planned to produce propylene oxide and polyols there. Instead, PTTGC will look into the possibility of building such a complex in Thailand, he says. The entire interview will be published at a later date.