JAKARTA: Three multinational corporations (MNCs), namely Sasol (South Africa), Siemens AG (Germany), and British Gas Lurgi (India), are competing for coal-to-olefin conversion projects in East Kalimantan and South Kalimantan, which are estimated to worth an investment of US$300 million. Director General of Manufacture-Based Industries at the Ministry of Industry Panggah Susanto revealed the government saw a possibility of diversifying raw materials in the petrochemical sector from oil to other raw materials, such as coal and gas. "Raw material diversification is part of government efforts to create independent upstream and downstream national petrochemical production," he told Bisnis yesterday. He added the government was facilitating the investment plants of several companies in East Kalimantan and South Kalimantan. Among the companies are Suid Afrikaanse Steenkool en Olie (Sasol), Siemens, and British Gas Lurgi. The projects are estimated to worth US$300 million. "They are interested in investing in coal-to-olefin conversion plant. Sasol, for example, will produce olefin from coal. What they need is young coal. Right now, they are seeking domestic coal producers as their partners." The discourse of switching raw materials from crude oil to gas and coal came up following the soaring global crude oil price to US$90 per barrel and even US$94 per barrel for February 2011 shipment. Secretary General of the Indonesian Olefin, Aromatic, and Plastic Industries Association (INAPlas) Fajar AD Budiyono previously disclosed the government had designed a plan to develop a petrochemical industry cluster in East Kalimantan, which would switch raw material from crude oil to coal and gas. He said coal and gas would be more efficient to produce olefin (ethylene and polyethylene). At the moment, added Fajar, some domestic and foreign companies had been sounding a partnership on the coal-to-olefin conversion project, which is estimated to be located in Kutai Kartanegara, East Kalimantan. "We hope the partnership can be realized next year," he said without exposing the names of the companies involved. (Bisnis, December 28) Application of SNI Panggah added the government was also preparing the application of 20 Indonesia National Standards to downstream petrochemical products, such as cast polypropylene film (CPP film), sacks, tarpaulin, and other flexible packaging products, to protect the domestic industry from the invasion of imported products. "The SNIs has been completely deliberated by the technical committee. After that, they will be submitted to the Standardization Center and, then, to the National Certification Agency [BSN}. However, some of the products probably will only be charged with voluntary SNIs instead of mandatory ones," he said without mentioning the products. (wiw)

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