Indonesia Expat

Foreign Investors Eye Gas-Based Petrochemical Investment


Indonesia’s government has welcomed foreign investors exploring gas-based petrochemical factories in Central Sulawesi and West Papua.

Prospective investors are conducting feasibility studies on potential gas fields in Masela, Bintuni and Banggai, Fajar Budiyono, General Secretary of the Olefin, Aromatic and Plastic Industrial Association, said.

“One that’s most likely confident enough to invest is Ferrostaal from Germany. Others that are coming back to explore more opportunities are companies from Thailand, Saudi Arabia, China and Japan. We hope to at least get one investor, but they still want to make sure about the availability of gas supply,” Budiyono said, as reported by Bisnis.

Budiyono added that investors see an attractive opportunity in the gas-based petrochemical industry, due the high import demands of polymer and monomer products.

Domestic petrochemical factories currently cannot service the demand for petrochemical derived products, with demand reaching around 5.6 million tonnes of product a year.

The country lacks a petrochemical production base to produce gas-based polymer and monomer, while the upstream factories are still dependent on naphtha, leading to further opportunities for investors.

The Ministry of Industry is yet to set a price for gas produced from the Masela Block through a ministerial coordinated meeting, although under the current plan the government is likely to stick with US$3.5 to US$5.86 per million British Thermal Unit (mmBtu).

Minister of Industry Airlangga Hartono said the government will ensure future locations of the factories will be near delivery points within the development complex to ease business.

Indonesia’s energy industries are favourite among investors, with booming demand and rich natural resources.

See: Aluminimum Investors Wanted In Tanah Kuning Industrial Zone Development

Image credits: Varia

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