SINGAPORE/JAKARTA – Two Chinese language polyester fibre makers are looking for Beijing’s approval to construct a $10 billion refinery and petrochemical advanced in Indonesia, sources with direct information of the matter instructed DailyKhaleej.
The transfer comes as China ramps up talks on mega investments in Southeast Asia as a part of President Xi Jinping’s Belt and Highway Initiative, and as Beijing limits approvals for new home refineries to chop carbon emissions and a gas provide overhang.
East China-based Tongkun Group and Xinfengming Group are planning a refinery-petrochemical advanced in North Kalimantan province on Borneo Island, three sources mentioned, to supply feedstocks for chemical fiber.
Led by Tongkun, the proposed petrochemical advanced would come with a 200,000 barrels-per-day refinery and an 800,000 tonne per 12 months ethylene unit, which may very well be expanded sooner or later, mentioned two of the sources.
The challenge can be a part of a deliberate industrial park in North Kalimantan the place firms broke floor on a $2.6 billion hydropower challenge final month to draw aluminium, battery and electrical car producers.
Tongkun has begun feasibility research for the challenge, which might partly make paraxylene for its rising manufacturing of purified terephthalic acid (PTA) in China, a feedstock for polyester fibre, two sources mentioned.
Additionally it is looking for approval from China’s state planner, the Nationwide Improvement and Reform Fee (NDRC), they mentioned.
A Tongkun investor relations official mentioned the Indonesia refinery challenge is at an early strategy planning stage however declined additional remark. A Xinfengming investor relations official declined to remark.
The NDRC didn’t reply to a request for remark.
In November, high executives of the 2 Chinese language firms briefed Indonesian President Joko Widodo on their funding plans in North Kalimantan on the sidelines of the G20 summit in Bali, in keeping with a submit dated Nov. 18 on Tongkun’s official WeChat account that gave few particulars.
Luhut Pandjaitan, Indonesia’s minister of maritime and funding affairs, met final week in Beijing with NDRC chairman Zheng Shanjie and Chinese language International Minister Qin Gang, each newly appointed in March, discussing Chinese language funding in Indonesia.
With out mentioning particular tasks, Luhut mentioned Jakarta hoped for extra Chinese language participation in constructing the nation’s new capital and the North Kalimantan industrial park and investing in renewables and new vitality autos, Chinese language state media reported.
His workplace didn’t reply to DailyKhaleej’ questions concerning the refinery challenge.
POTENTIAL HURDLES
The challenge might face Beijing’s scrutiny on outbound investments as China has imposed a basic cap on capital outflows since 2018, two sources mentioned, with out elaborating.
The 2 Chinese language companies, with no earlier abroad tasks, are venturing into a rustic the place refinery plans by oil producers Saudi Arabia, Kuwait and Iran have didn’t pan out.
Indonesia’s state-owned Pertamina has mentioned it was unable to agree on tasks with a few of these companions, whereas the Bontang refinery challenge that Iran was excited about, was placed on maintain by the Indonesian authorities.
Whereas Chinese language state oil giants Sinopec and PetroChina personal refineries in Saudi Arabia and Singapore, Tongkun and Xinfengming are among the many few non-state-owned Chinese language firms increasing globally into refining trying to produce their very own feedstocks for polyester.
One other privately-owned Chinese language polyester maker, Hengyi Petrochemicals, began working an identical advanced in Brunei in 2019, with plans to spend $13.6 billion for an enlargement.
Final week, Prime Minister Anwar Ibrahim of neighbouring Malaysia mentioned China pledged $39 billion in funding in his nation, together with from automaker Geely and chemical group Rongsheng Petrochemicals. ($1 = 6.8787 Chinese language yuan renminbi)
(Reporting by Chen Aizhu in Singapore and Bernadette Christina in Jakarta; Extra reporting by Beijing newsroom; Enhancing by Sonali Paul)
