Indonesia's state-owned oil and gas firm Pertamina is partnering Thailand's PTT Global Chemical (PTTGC) in a 50:50 joint venture to build a petrochemical complex in Indonesia, with an estimated cost of US$5 billion. The complex, consisting of a 1 million tonne olefins plant and a downstream polymer facility, will start up by 2017 and supply the Indonesian market. Pertamina and PTTGC will sign a partnership agreement in April and aim to set up a joint venture this year.

The two firms said in December they had signed a memorandum of understanding to study a joint investment in a petrochemical complex but gave no details. The project will be the first large-scale petrochemical complex in Indonesia, PTTGC said, as the country moves to meet growing demand and reduce imports of petrochemical products. It will also be PTTGC's first investment in Indonesia as it aims to expand overseas and especially in Southeast Asia.

PTTGC, 49% owned by Thailand's largest energy firm PTT, plans to invest US$4.5 billion from 2013 to 2017 in capacity expansion and joint investments as it focuses on speciality chemicals and green products, which offer high margins. Thailand's largest petrochemical firm, PTTGC is also considering the possibility of jointly investing in a Malaysian petrochemical project with that country's state-run oil company Petronas. PTTGC has said it expects a decision on the project in the third quarter of 2013.

Meanwhile, Pertamina recently tied up with speciality chemical firm Celanese to develop synthetic fuel ethanol projects utilising Celanese’s proprietary TCX ethanol process technology. The partners will select the first production location, initiate project permits and negotiate coal supply and other industrial partner agreements by the end of 2013, with the production of fuel grade ethanol to begin 30 months later upon receiving government approvals. Pertamina says the project is in line with the government’s call to increase the contribution from gas and other non-fossil energy contribution, as well as liquefaction coal, which is targeted to contribute about 2% by 2025.