The decline in gas prices is estimated to increase the growth of the petrochemical industry to 5.2 percent next year, compared to this year's projection of 5 percent. The decline in gas prices will reduce the selling price of petrochemical products by up to 5%, thereby increasing competitiveness. The decline in gas prices as a raw material is expected to encourage the petrochemical industry to expand on a large scale. A number of companies that intend to build a methanol plant will realize the investment plan.
For example, currently, as many as two companies each from Germany and Japan are interested in building a petrochemical plant with a total investment of US$ 2 billion in Maluku. They plan to utilize the Masela Block liquefied natural gas (LNG). Apart from this, the petrochemical project in Bintuni Bay, West Papua, has the potential to be realized.
One of the investors in this area is LG Chemical, which plans to build a methanol plant with an investment of US$ 1.2 billion. Methanol can be processed into olefin products, ethylene, and propylene, to be further processed into polymer products, polypropylene (PP), and polyethylene (PE).
PP and PE are plastics raw materials that are widely used. Currently, olefins in Indonesia are produced from the processing of naphtha, a derivative product of crude oil.
Secretary-General of the Indonesian Association of Aromatic Olefins and Plastics (Inaplas) Fajar Budiono said that petrochemicals are the industry most ready to enjoy a decline in gas prices starting in early 2017. The price of gas as an energy source is planned to be set at US$ 6 per MMBtu at the plant gate. The price of gas as a raw material is expected not to exceed US$ 4 per MMBtu.
He added that if the gas price was more than that number, the industry would have to recalculate. This price is the maximum price so that the industry can compete. He emphasized that if the gas price is below US$ 4 per MMBtu, the petrochemical industry can be developed in Bintuni Bay and Masela or in accordance with the Ministry of Industry's plan. That way, the petrochemical industry has the opportunity to develop methanol which can be processed into olefin and polymer products. Later more investors will develop methanol.
Because, currently, a lot of methanol is still imported. By strengthening the methanol derivative industry, he emphasized, the industry could be more resilient from price fluctuations and changes in economic assumptions. Industry considerations at this time, he stated, the industry has two considerations in developing methanol to polymer products if it is built-in Bintuni Papua or in Masela in Maluku, the logistics price will be very expensive.
For this reason, it is necessary to support the operation of the sea highway. If in the next four years the infrastructure is not ready, the factory will be built in Java. According to Fajar, the industry will see which one is cheaper, especially for the next four years. Ideally, the industry has a capacity of 450 thousand tons of olefin, so that it can be reduced to a polymer factory, namely 1.15 million tons of PP per year.
Fajar assesses that this amount alone is not sufficient to meet the needs in Indonesia, which is estimated to reach 1.6-1.7 million tons in the next four years. Previously, Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan stated that the reduction in gas prices would be prioritized for three industries, namely fertilizers, petrochemicals, and steel.
The government will subsidize the three sectors to get cheap gas prices. Minister of Energy and Mineral Resources (ESDM) Ignasius Jonan stated that the gas price for the three industrial sub-sectors is a maximum of US$ 6 per MMBtu.
Investor Daily, Page-8, Friday, Nov 18, 2016
No comments:
Post a Comment