Indonesia’s new refining-cum-petrochemical project by the Chinese

Chinese polyester giants, Tong Kun and Xinfengming groups are building a refining-cum-petrochemical complex in Indonesia, by far the biggest private, overseas investment by a Chinese entity. The product slate, its scale and the amount of funds potentially to be invested are unprecedented in Indonesia, outstripping all previous investments in the refining and petrochemical sectors even by local Indonesian petrochemical leader, Chandra Asri and the national oil company, Pertamina. It is also the first time a Chinese entity is moving away from its traditional, comfort zone of the Chinese home market, and investing in Southeast Asia. However, Wood Mackenzie is sceptical that the complex can start running "in four years' time", as claimed by the shareholders. This Insight (attached) will lay out the potential pitfalls of this investment, and comment on the possible rewards justifying it; and finally explaining why this project may likely for the longer term, rather than by 2028.