Tuban Petrochemical, East Java, Indonesia

The Tuban Petrochemical project, which began in the early 1990s, could be called a project of mixed fortunes. The construction of the huge new $2.3bn petrochemical complex (an aromatics and an olefin plant) was at its height and over 65% completed in 1998, when disaster struck and the Asian economic crisis caused the project to be suspended. $500m had already been spent on construction.

But this was not the end of the project. The construction company Tirtamas Group had debts of Rp4.1 trillion ($478m) but was taken in hand by the Indonesian Bank Restructuring Agency (IBRA). A new company, PT Tuban Petrochemical Industries, was then formed to finish the project.

Fresh finance of $400m was raised from Japanese creditors (underwritten by the Indonesian Government) and in 2004 the construction of the aromatics plant continued.

Meanwhile, the partially constructed olefins plant was dismantled and sold off to BASF for a project in China.


The starting plan was for a 100,000 barrels per day condensate splitter, a 700,000t per year naphtha cracker, and a 500,000t per year paraxylene plant.

In addition to this the plant was also to process other olefins, aromatics and polymer and polymer precursor derivative projects, which would include polyethylene, polypropylene, styrene monomer, vinyl acetate monomer and also vinyl chloride monomer. The production was to have totalled 3.6 million tons of aromatics and other oil products.


The aromatics part of the project continued construction in 2004 with the following partners having a stake. Overall control of the project is by Trans Pacific Petrochemical Indotama (TPPI) (60%) (the company is a wholly owned subsidiary of PT Tuban Petrochemical Industries), Tuban Petrochemical Pte Ltd (Siam Cement PCL) (20%), Nissho Iwai (5%), Itochu Corporation (5%) and Pertamina, an Indonesian state oil company (10%).

The amount of finance to complete the whole plant was estimated at $475m. The Japan Bank for International Cooperation (JBIC) in conjunction with Sumitomo Mitsui Banking Corp and Mitsui & Co were able to offer fresh finance of $400m over a period of eight years.


"By 2007 the aromatics plant was producing above its design capacity for its paraxylene output and expansion was being considered."

The overall complex was expected to have capacity for the production of 700,000t per year of ethylene, 500,000t per year of paraxylene, toluene 100,000t per year, orthoxylene 120,000t per year and 300,000t per year of benzene.

In addition the plant should produce 335,000t per year of reformate (which can be recycled for aromatics production), 1 million tons per year of light naphtha, 189,000t per year of diesel fuel and 1.1 million tons per year of kerosene (taken off for fuel oil production).


Three construction firms were awarded contracts to continue the building of the plant, including PT Adhi Karya, a state-owned construction company. In early 2006 the delayed aromatics plant was opened and started to receive condensate as raw material from the Senipah gas fields. By 2007 the aromatics plant was producing above its design capacity for its paraxylene output and expansion was being considered.

The capacity enhancement or debottlenecking project is to require an investment of $100m (paraxylene production will be increased to 800,000t per year). Enhanced paraxylene capacity is required for the provision of additional feedstocks for the production of terephthalic acid, required for the production of polyester fibre.