IPCC, Pertamina Sign Petrochemical MoU

IPCC is ready to buy aromatic compounds from Pertamina.IPCC is ready to buy aromatic compounds from Pertamina.

Iran Petrochemical Commercial Company and the Indonesian state-owned oil and gas giant Pertamina have signed a memorandum of understanding on cooperation in petrochemical industry, IPCC's chief executive said on Tuesday.

A delegation from Pertamina explored avenues of petrochemical cooperation in a meeting with high-ranking IPCC officials in Tehran.

“The MoU calls for the Indonesian side to purchase liquefied petroleum gas, polymers, gas condensates and bitumen from IPCC directly,” Mehdi Sharifi Niknafs was quoted as saying by Shana.

"LPG from Iran is important to fulfill Indonesia’s domestic needs because it does not produce enough LPG to meet its domestic demand."

The official said Pertamina has to import almost 60% of LPG used in Indonesia and imports are expected to rise annually in line with rising consumption.

Stressing that IPCC is ready to buy aromatic compounds manufactured in Pertamina, Niknafs noted that plans have been made to form an executive body comprising representatives of the two enterprises to conclude the final agreement.

Pointing to IPCC's high growth potential and previous commercial ventures, he said, "The company is all set to expand its trade scope internationally."

According to Pertamina’s vice president for integrated supply chain, Daniel Purba, Pertamina would import its first shipment of liquefied petroleum gas from Iran in September. Pertamina in May agreed to purchase 600,000 tons of LPG from the National Iranian Oil Company.

"LPG consumption last year reached 7 million tons, of which 5.56 million tons were subsidized," Purba said.

Former Indonesia's energy minister, Sudirman Said, had announced that Pertamina would get a discount on its purchase of LPG as he believed purchasing LPG from Iran was the best option for Indonesia.

“It’s $25 lower than the market price,” Sudirman explained.

  Oilfield Survey Agreement

NIOC and Pertamina have recently signed a nondisclosure agreement that allows the state-owned Indonesian oil firm to conduct studies on two Iranian oilfields.

NIOC CEO Ali Kardor and Pertamina's CEO Dwi Soetjipto signed the agreement in Tehran.

Under the agreement, Pertamina has six months to survey Iran's onshore Abteymour and Mansouri oilfields.

"The agreement is the first step of cooperation between the state-run oil companies of Iran and Indonesia" in the upstream oil industry, Kardor said, stressing that NDA is part of efforts to ease the transfer of foreign technology to tap into Iran's massive hydrocarbon reserves.

"Iran is one of Pertamina's priorities. We're serious about investing in Iran's upstream oil and gas, which will help Iran increase its oil production," Soetjipto was quoted as saying by Reuters in a statement.

  Replacing Energy Minister

Indonesia's president on Monday removed Arcandra Tahar as energy and mining minister, the state secretary said, following reports that he held both Indonesian and US citizenship.

"To address public questions about the citizenship of Arcandra Tahar ... the president has decided to honorably remove Arcandra Tahar and appoint Luhut Pandjaitan as interim minister," said State Secretary Pratikno, Reuters reported.

Pandjaitan will also maintain his current position as coordinating maritime minister.

Tahar, a former executive at Texas-based offshore engineering firm Petroneering, was part of President Joko Widodo's second Cabinet reshuffle last month. He served less than three weeks as minister.