MOSCOW (MRC) -- Two Chinese polyester fiber makers are seeking Beijing's approval to build a USD10-B refinery and petrochemical complex in Indonesia, sources with direct knowledge of the matter told Reuters.
The move comes as China ramps up talks on mega investments in Southeast Asia as part of President Xi Jinping's Belt and Road Initiative, and as Beijing limits approvals for new domestic refineries to cut carbon emissions and a fuel supply overhang.
East China-based Tongkun Group and Xinfengming Group are planning a refinery-petrochemical complex in North Kalimantan province on Borneo Island, three sources said, to produce feedstocks for chemical fiber. Led by Tongkun, the proposed petrochemical complex would include a 200,000 barrels-per-day refinery and an 800,000 ton per year ethylene unit, which could be expanded in the future, said two of the sources.
The project would be part of a planned industrial park in North Kalimantan where companies broke ground on a USD2.6-B hydropower project last month to attract aluminum, battery and electric vehicle manufacturers.Tongkun has begun feasibility studies for the project, which would partly make paraxylene for its growing production of purified terephthalic acid (PTA) in China, a feedstock for polyester fiber, two sources said.
It is also seeking approval from China's state planner, the National Development and Reform Commission (NDRC), they said. A Tongkun investor relations official said the Indonesia refinery project is at an early planning stage but declined further comment. A Xinfengming investor relations official declined to comment.
We remind, in November, top executives of the two Chinese companies briefed Indonesian President Joko Widodo on their investment plans in North Kalimantan on the sidelines of the G20 summit in Bali, according to a post dated Nov. 18 on Tongkun's official WeChat account that gave few details.