Dubai — Abu Dhabi National Oil Company said Monday it signed agreements with Indonesia's Pertamina, Southeast Asia's biggest energy consumer, and Chandra Asri on potential projects in Indonesia, including a petrochemicals project and supply of naphtha and LPG.
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The memorandum of understanding with Pertamina is for the potential development of a crude to petrochemicals project in Balongan, Indonesia, as well as a sales agreement to supply Pertamina with up to 528,000 mt of LPG by the end of 2020, ADNOC said in a statement.
The MOU with Chandra Asri is to explore the potential supply of naphtha to the company, with the product used as feedstock for a current and potential new cracker complex in Indonesia.
"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," ADNOC Group CEO Sultan al-Jaber said in the statement.
The potential crude to petrochemicals complex would build upon the comprehensive framework agreement signed by ADNOC and Pertamina in 2019. The LPG sales agreement would allow for both FOB sales, in which customers collect the product from Abu Dhabi, and CFR sales, in which ADNOC delivers product to customers.
"The agreements with ADNOC will strengthen Pertamina's ability to carry out its national duty, realizing Indonesia's energy security in a challenging and complex environment," said Nicke Widyawati, Pertamina CEO. "We expect that both the potential refinery development at Balongan and the direct LPG supply will allow us to optimize Indonesia's oil and gas value chain, better serve the domestic market through our vast distribution networks across the whole archipelago and access new opportunities to meet growing global demand for petrochemical products."
Indonesia is seeking to attract investments to its energy and petrochemical industry in a bid to boost its domestic output and lower dependence on imports of products.
ADNOC, which pumps most of the UAE's 3 million b/d, is expanding its footprint with investments in Asia in order to secure supply for its products as it raises its oil production capacity to 4 million b/d in 2020 and 5 million b/d by 2030.
ADNOC had signed an agreement with Pertamina in 2019 to look into possible collaboration in the oil and gas industry, both locally and globally.
Projects may include participation in the UAE's upstream oil and natural gas sector, as well as refining and petrochemicals, LNG, LPG, aviation fuel and fuel retail opportunities in Indonesia, it said at the time.
In addition, the two partners will explore working together in transportation, trading and storage in the UAE, Indonesia and globally.
Abu Dhabi-owned Mubadala Investment Company, which manages $225 billion in assets, and Austria's OMV, in which Mubadala has a 25% stake, last year signed an MOU with Indonesian petrochemical companies PT Chandra Asri Petrochemical and PT Chandra Asri Perkasa to explore collaboration in the petrochemical field in the Asian country.