Jan. 20 (Bloomberg) -- PT Transpacific Petrochemical Indotama, which resumed its production facility in November after a two-year halt, will seek half its condensate requirement from overseas suppliers after a deal with Indonesia’s state energy company ends in May.
The petrochemicals maker known as TPPI is seeking about 1 million barrels a month of the feedstock from potential suppliers starting in June, Chief Executive Officer Aris M. Azof said in an interview in Singapore last week. The company operates a 100,000 barrel-a-day unit at its Tuban plant in east Java that helps convert condensate into fuels such as naphtha used in the production of plastic.
“We have been discussing with Singapore players about buying the condensate,” said Aris, who is seeking sweet condensates of all origins. “We will explore any possibility as long as the condensate is economical.” Sweet varieties have a lower sulfur content than sour grades.
TPPI has a six-month agreement to take all its condensate requirement from PT Pertamina in exchange for supplying its output to the government-owned Indonesian company.
TPPI is also in talks to buy 1 million barrels a month of the feedstock from Pertamina when the existing deal between the companies ends in May, Aris said.
Pertamina now supplies the condensate splitter unit at Tuban with local and international grades including Australian North West Shelf, Bambang Adji, a commercial director at TPPI, said in an interview last week.
“The condensate market is promising,” said Bambang. “Many new condensates are coming into the market from Africa, Kazakhstan, Turkey. We believe we can source the condensate.”
The condensate splitter is operating at 70,000 barrels a day, 30 percent less than its designed capacity, according to Bambang. Indonesia’s domestic condensates have a higher content of aromatics, a petrochemical ingredient, compared with 10 years earlier, he said.
The bigger amount of aromatics in Indonesian condensates means TPPI can run its petrochemical units at more than their designed capacity using a smaller amount of feedstock.
“We are running at more than full capacity for paraxylene, and can achieve this at 70,000 barrels a day,” Bambang said. “We have no plans to increase to 100,000 barrels a day.”
TPPI’s paraxylene output is about 600,000 metric tons a year, compared with the unit’s designed capacity of 500,000 tons, Bambang said. The company is producing 360,000 tons a year of benzene and almost no orthoxylene and toluene as it maximizes output of paraxylene, he said.
Paraxylene is used in the process of making synthetic fibers and plastics. Benzene, orthoxylene and toluene are found in car additives, solvents and dyes.
The splitter also yields naphtha as a byproduct. Output is about 500,000 to 600,000 barrels a month, Bambang said.
No maintenance is scheduled this year at the Tuban facility, according to Bambang. The company, which employs about 600, carried out repairs on a continuous catalytic regeneration, or CCR, unit from Dec. 25 for a week.
Some Iranian condensates are unsuitable for TPPI because their sulfur content is too high, according to Aris. “But Iran is a big country, and we will explore all possibilities, as long as the condensate is the right price,” he said.
--Editors: Pratish Narayanan, Mike Anderson