Yulian Dekri, president-director and CEO of Trans-Pacific Petrochemical Indotama (TPPI), talks to The Energy Year about how the company has addressed the Covid-19 crisis and the related drop in demand for downstream products. Majority-owned by Pertamina and Tuban Petro, TPPI plans on becoming the most comprehensive producer of petrochemicals in Indonesia.
Did you have to reduce your production profiles or change them in any way?
Yes. The virus has slowed down fuel and fuel products as well as aromatics and olefins demand growth in 2020. Covid-19 will put additional pressure on the industry. The oil prices decreased sharply in April until the crash of the WTI to negative USD 37, something that has never happened before. The reason is the market suddenly flooding with oil while facing limited storage. During the pandemic, demand decreased suddenly, including in Indonesia. The country’s demand for oil products in April decreased 30-40%. I think we are seeing the same situation with the price of aromatic products, for example paraxylene and benzene.
TPPI is part of the industry in Indonesia and is feeling the effects of the Covid-19 pandemic. Our plant currently still operates but with minimum to medium intake: We are taking only 60-70% of our normal intake. To compensate for the income reduction we must optimise our costs. We cut high-cost production and have arranged an optimised annual acting budget, cutting it by approximately 25%.
What is the biggest challenge for you? Is it getting access to feedstock or do you have other operational issues?
The biggest issue is our production. Because the demand decreased sharply, this means our revenue also decreased sharply, and that is our biggest challenge. In terms of our employees, they are okay and there are no problems.
You had a plan to increase aromatics production from 50,000 bpd to 55,000 bpd, a large plan to integrate the Tuban Petro units and a goal of having an olefins centre to increase production to 780,000 tonnes. Is this all going to be put on hold?
The short-term strategy is survival, but in the medium and long term we are still focused on our important projects. This is an important project, not just for TPPI but also for our government and community. The projects are still running.
I think that some behaviour may change, but aromatics are still in demand and will increase in the future. In general, I believe this segment is still new and relevant for us.
Russell Boodoo, regional business development manager at TOSL Engineering, talks to The Energy Year about the company’s role in supporting… Read More
Suresh Pillai, CEO of Mark Technologies, talks to The Energy Year about the company’s involvement in Jurassic gas production and… Read More
Narvin Salick, district manager of Gyrodata Trinidad, talks to The Energy Year about how the company has been impacted by… Read More
Billy Lacobie, CABGOC’s managing director for Southern Africa, talks to The Energy Year about recent strategic and operational developments in… Read More
Angola is working hard to increase its power generation capacity by boosting hydro and solar energy, as well as linking… Read More
Jasem Al Nouri, deputy managing director of Nouri Industrial Establishment, talks to The Energy Year about the company’s long-standing commitment… Read More
This website uses cookies.