Samsung, Hyundai race for $4 bn Indonesia petchem project

South Korean builders Samsung Engineering and Hyundai Engineering Co. are in a tight race to win a $4 billion petrochemical project in Indonesia.

Samsung and Hyundai said on Dec. 15 they each signed a contract for the front-end engineering design (FEED) stage of the Trans-Pacific Petrochemical Indotama (TPPI) Olefin Complex Development project in Tuban, East Java province.

The project involves building a naphtha cracker with an annual capacity of 1 million tons; a high-density polyethylene (HDPE)/linear low-density polyethylene (LLDPE) factory with a capacity of 700,000 tons a year; a low-density polyethylene (LDPE) plant of 300,000 tons per year; and a polypropylene (PP) facility of 600,000 tons a year.

TPPI, a subsidiary of Indonesia's state-run oil and gas giant PT Pertamina, aims to complete the project in 2024.

Samsung has formed a consortium with Technip, a French engineering company, and PT Tripatra Engineers and Constructors, an Indonesian company. Hyundai joined hands with Saipem, an Italian multinational oilfield services company, and Indonesian partners.

The results of the FEED work of each consortium are expected to decide the winner of the engineering, procurement and construction (EPC) contract for the largest petrochemical project in Indonesia.

“We aim to successfully carry out the FEED work to win the EPC deal and strengthen our position in Southeast Asia,” said a Samsung official.

A Hyundai official expressed confidence, saying “We are well placed for this project since we won a deal from Pertamina in 2019.”

Write to Jung-hwan Hwang at jung@hankyung.com
Jongwoo Cheon edited this article.