The Abu Dhabi National Oil Company (ADNOC) has signed a Memorandum of Understanding (MoU) to explore the potential development of a crude-to-petrochemicals complex in Balongan, Indonesia, PT Pertamina and PT Chandra Asri Petrochemical Tbk.
ADNOC also signed a Sales Agreement whereby it will supply Pertamina up to 528,000 metric tonnes (MT) of LPG by the end of 2020. Chandra Asri and ADNOC also signed an MoU to explore the potential supply of naphtha to Chandra Asri in Indonesia that would be utilized as a feedstock for their current and potential new cracker complex in Indonesia.
Sultan bin Ahmad Sultan Al Jaber, minister of State and ADNOC Group CEO, signed the agreements with Nicke Widyawati, Pertamina president director and CEO, and Erwin Ciputra, Chandra Asri president director.
“The agreements signed with Pertamina and Chandra Asri will potentially help ADNOC to secure additional in-market presence in one of Southeast Asia’s fastest-growing economies, enabling new domestic value-creation opportunities across the hydrocarbon chain. Today’s announcement is a testament to the success of ADNOC’s international partnership strategy, our ability to consistently deliver innovative value-creation opportunities and the UAE’s strong ties with the Republic of Indonesia,” said Al Jaber.
The potential crude-to-petrochemicals complex would build upon the ambitions outlined in the comprehensive framework agreement signed by ADNOC and Pertamina in 2019, while accelerating Indonesia’s path towards petrochemical self-sufficiency.
The new Pertamina LPG Sales Agreement with ADNOC will allow for both FOB sales, in which customers collect products from Abu Dhabi, and CFR sales, in which ADNOC delivers products to customers. This flexibility supports ADNOC’s strategy to deliver more CFR cargo to its customers and build upon its trading and logistics capabilities.
ADNOC’s potential supply agreement with Chandra Asri will further expand ADNOC’s reach in Indonesia and is expected to help lay the groundwork for other potential areas of collaboration between the two companies.
ADNOC has embarked on a significant expansion of its downstream business as part of its 2030 smart growth strategy, with an intention to secure markets for its core hydrocarbon products and capture greater margins throughout the value chain. As well as developing and expanding its domestic downstream operations, ADNOC is also exploring a number of targeted international investment opportunities to support its refining and petrochemicals businesses.