JAKARTA (RambuEnergy.com) – China Petroleum Corporation (CPC), Taiwan is entering South East Asian nations downstream oil and gas sector, namely petrochemical industry, tapping the growing demand for petrochemical products in this region.
Recently, CPC signed a memorandum of understanding with Indonesia’s oil and gas state-owned company PT Pertamina to develop a petrochemical complex with an estimated investment of US$6.49 billion.
Both parties have agreed to develop a Naptha Cracker plant as well as a global scale petrochemical complex in Indonesia. Both parties have yet to determine the location of the petrochemical complex.
The Naphtha Cracker plant is estimated to replace imported products worth US$2.4 billion per annum.
“This cooperation becomes a momentum for Pertamina to strengthen its petrochemical business,” said Pertamina’s President Director Nicke Widyawati after the signing agreement in Bali.
The project is targeted to be completed in 2026. The Naphtha Cracker plant is projected to produce at least one million tons of ethylene per annum.
In related development, CPC Taiwan, a Taiwanese state-owned company, said in its website on Oct. 25, that the company and SOVICO Group of Vietnam have also signed a Memorandum of Cooperation (MOC).
The MOC provides for future collaboration between the two companies in the exploration for oil and gas, trading petroleum products and petrochemicals, lubricant sales and related investment opportunities. CPC itself will continue to develop its own and other business opportunities in Vietnam and Southeast Asian countries outside of this venture.
The SOVICO Group was founded by the Nguyen Thi Phuong Thao family and is a company well known in Vietnam. The Group has over 20 subsidiaries and its business scope covers civil aviation (Vietjet), oil trading and gas stations (PV Oil), real-estate (Long Thanh development projects and hotels), and banking (HD Bank).
The SOVICO Group is also active in developing renewable energy sources and in the power generation business. Their Vietjet airline is the one with the most flights between Taiwan and Vietnam; named one of Vietnam’s top 50 companies, it has a market value of over US$1 billion (approximately NTD 30 billion).
After having signed this MOC, CPC will use its Exploration & Production Division and other petroleum product-related business units as the basis for working with the SOVICO Group in the business areas mentioned earlier.
One significant objective for CPC in this is to expand investment in, and trade with, the countries covered by the New Southbound Policy and so bring to realization the long-term cultivation of relationships, diversity of development objectives and mutuality of benefit that are its core tenets.
Vietnam is a country with high growth potential. In recent years its economy has grown at the rate of 6% annually, and there is the view that additional gains are possible.
CPC is therefore actively engaging with Vietnam in the context of the government’s aforementioned New Southbound Policy: it currently has investment commitments in the form of the Dai Hai Petroleum Corporation (DHP) and the Maxihub Company Limited (Maxihub) respectively located in Haiphong City and Dong Nai province. (*)