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PT KPI and PT TPPI sign raw material processing agreement

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Hydrocarbon Engineering,

PT Kilang Pertamina Internasional (PT KPI) has officially signed a raw material processing agreement with PT Trans-Pacific Petrochemical Indotama (PT TPPI) to increase profitability of the refinery and petrochemical business it manages. Under the agreement, PT KPI is authorised to send raw materials to be processed through the PT TPPI refinery facility to produce high-value products. This includes gas oil, benzene, pertalite, pertamax, and paraxylene. This collaboration plan is critical to PT KPI's strategy and mission of reducing petrochemical product imports while developing synergy with PT TPPI to dominate the domestic petrochemical industry.

The President and Director of PT KPI, Djoko Priyono, stated that the synergy between PT KPI and PT TPPI is the key in suppressing the Current Account Deficit (CAD) or the domestic petrochemical oil and gas balance deficit. To reduce the CAD of national petrochemical products, through the agreement, KPI targets to produce 600 000 t of paraxylene produced by TPPI throughout 2022.

"PT KPI is committed to maximising the production of high-value petrochemical products considering the current national oil and gas balance deficit. Since 2021, PT KPI's refineries have maintained their reliability to supply raw materials for TPPI. We are optimistic that in 2022 while maintaining feedstock optimisation and refinery reliability, the profitability of Pertamina's refineries can also be increased," said Djoko Priyono, who was present and signed the raw material processing agreement.

In line with Djoko Priyono, Acting President Director of PT TPPI, Erwin Widiarta, revealed that PT TPPI is ready to oversee the cooperation scheme. "Synergy with PT KPI is relevant and strategic for PT TPPI's business acceleration. Moreover, in this agreement, changes have been made, including tolling fees previously covered, for pertalite, gas oil, xylene series products (consisting of paraxylene and orthoxylene), and benzene," explained Erwin Widiarta. Erwin continued that PT TPPI will be committed to producing high-value products that meet PT KPI's specifications.

Currently, PT KPI, through PT TPPI, is getting a strategic mandate in improving the national petrochemical industry. The PT TPPI aromatic revamping project, which is targeted for completion in 2023, is projected to increase paraxylene production to 780 000 tpy.

The agreement continues PT Pertamina (Persero) and TPPI's cooperation. Since the restructuring and Legal End-State of KPI in 2021, the operation of the TPPI refinery has been taken over and is under the auspices of PT KPI. This cooperation in processing raw materials is also a form of support for Persero through KPI, as the Majority Shareholder of TPPI.

"The vision of PT KPI and PT TPPI in supporting national petrochemical sovereignty requires the support of stakeholders including the government and related associations. As owners and operators of petrochemical refineries, we are aware of business challenges, including a Non-Tariff Barrier policy on product imports as well as reforming a more efficient shipping system. So, in addition to increasing refinery reliability and profitability, in the future, we are committed to continuing to strengthen synergies with the government and related associations," concluded Erwin Widiarta.

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