A plan by state-owned oil company CPC Corp, Taiwan (台灣中油) to relocate its closed Kaohsiung naphtha cracker to Indonesia fell through yesterday after its Indonesian partner nixed the move, the Taiwanese company announced.
PT Pertamina, Indonesia’s state-owned oil and gas company, ended up seeing the move as too costly and felt funds devoted to the CPC plant could be used instead to build a new naphtha cracker, CPC said.
It would only take an additional investment of US$352 million to construct a new naphtha cracker, compared with the expense of acquiring the secondhand facility from CPC, a CPC statement released yesterday said.
Obtaining CPC’s used naphtha cracker would only deliver a 2 percent higher return on PT Pertamina’s investment than investing in a brand-new facility, it said.
CPC had been in talks to set up a joint venture with the Jakarta-based company to move its fifth naphtha cracker to the Indonesia.
The Taiwanese oil giant in 2015 closed the complex in Kaohsiung’s Nanzih District (楠梓) amid rising awareness of environmental issues and has been looking to sell it.
The priority would now be to complete the dismantling of the plant by the end of the year and to decide whether to reuse some of its parts in CPC’s other refineries or to put the dismantled plant up for sale through an open tender, CPC vice president Ann Bih (畢淑蒨) said.
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