New steam cracker and derivatives project planned for West Java

On 7th December, PT Lotte Chemical Indonesia (LCI), a subsidiary of Lotte Chemical Titan Holding, held a ground-breaking ceremony for its planned 1 Mtpa steam cracker and derivatives project in Cilegon, Banten in West Java. The project is estimated to cost over $3.5bn. Construction activities are expected to begin in 2019 or 2020 and the project is targeted for completion in 2023.

Naphtha will be the main cracker feedstock, although some flexibility is planned for cracking LPG. Lotte Chemical Titan has existing 450 ktpa PE capacity in Indonesia, which has been operating based on purchased ethylene. Having a cracker co-located at the same site is expected to reduce its exposure to feedstock procurement and logistics. Lotte Chemical intends to use most of the ethylene produced captively, with any balance for merchant sale. With the new planned cracker, Lotte also intends to start producing PP in Indonesia. Once complete, this project will mark the second steam cracker in Indonesia. The only other cracker existing in Indonesia is Chandra Asri’s 860 ktpa cracker, which will be expanded to 900 ktpa by 2020.

Indonesia is currently only at 36 percent self-sufficiency in the ethylene chain, and is a net importer of ethylene derivatives. The planned new cracker by Lotte Chemical Indonesia is expected to help raise the ethylene self-sufficiency to above 50 percent once it is at full operations.

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3rd December 2018