11 December 2013
Details
PTT Global Chemical Plc (PTTGC)
has signed
the Manufacturing Joint Venture Heads of Agreement
(MJV-HOA) with
PT Pertamina (Persero) (Pertamina)
for the joint venture investment of
a world scale Petrochemical Complex
in Indonesia
which is expected to
start commercial operation in 2018.
The joint investment will include
* a world scale cracker
* and downstream products complex,
* with no investment in the refinery complex.
The prelimiary investment cost is estimated to be
around USD 5 billion.
This collaboration advancement comes after
the completion of
the extensive project preliminary feasibility study
- a part of the partnership HOA signed earlier
since April 2013.
This MJV-HOA is aimed to further
* materialize the agreed joint venture priciples
and investment scope,
* as well as enable both parties to finalize the project details
by early 2014 prior to conducting
the detail bankable feasibility study and
Front End Engineering Design (FEED),
which shall focus on a further detailed assessment of
greater value enhancement through various synergies
and integration at the selected location
to assure the complex economics and competitveness.
Moreover, Pertamina and PTTGC have reached
the project definition understanding including
* a common goal and objectives,
* a competitive investment model and
* appropriate site selection,
* as well as each party's strength to be leveraged
for building Joint Venture's competitiveness.
This will move forward for
final investment decision, anticipated in 2015.
This collaboration fits well with
PTTGC's growth aspiration (1-step adjacencies)
* to strengthen our core business as well as
* strengthening our footprints in Southeast Asia.
Moreover, this investment aims to
capture mainly the domestic market share that
we see as potentially growing rapidly in Indonesia
in the years to come.
Equity structure
Pertamina will be the major shareholders,
holding 51 %
and PTTGC would be holding 49 % in the Joint Venture.
However, based on the HOA signed, the Joint Venture
structure allowed PTTGC to seek for a potential third party
to join the investment if the third party could enhance
higher benefit to the project while
Pertamina would remain a major shareholder.
In addition, Pertamina and PTTGC will also enter into
a marketing and trading joint venture
to initially conduct
both Pertamina's and PTTGC's polymer products
marketing and distribution throughout Indonesia
in the near future.
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