Abu Dhabi’s ADNOC signs agreements with Indonesia’s Pertamina and Chandra Asri

As part of its 2030 smart growth strategy, ADNOC has undertaken expansion projects of its downstream business to secure markets for its core hydrocarbon products



The Abu Dhabi National Oil Company (ADNOC) has signed agreements with Indonesia’s Pertamina and Chandra Asri. Pertamina, official news agency WAM reported.

ADNOC signed a Memorandum of Understanding (MoU) to explore potential development of a crude to petrochemicals complex in Balongan, Indonesia, building upon the agreement signed by ADNOC and Pertamina in 2019, supporting Indonesia’s ascend to petrochemical self-sufficiency, a statement said.

The two entities also signed a sales agreement, according to which ADNOC will supply up to 528,000 MT of LPG to Pertamina by the end of 2020.

The Pertamina LPG sales agreement will allow for free-on-board (FOB) sales – in which customers collect product from Abu Dhabi – and cost and freight (CFR) sales, in which ADNOC delivers product to the customers.

The flexibility will bolster ADNOC’s strategy to deliver more CFR cargos to its consumers and strengthen its trading and logistics capabilities, the statement said.

Chandra Asri and ADNOC also partnered to explore potential supply of naphtha to Chandra Asri that would be utilised as feedstock for their existing and potential new cracker complex in Indonesia. This partnership would further ADNOC’s role in Indonesia, and will assist in potential collaboration in other areas between the two companies.

ADNOC has taken on the expansion of its downstream business – a part of its 2030 smart growth strategy – to secure markets for its core hydrocarbon products, the statement said.

Dr. Sultan bin Ahmad Sultan Al Jaber, Minister of State and ADNOC group CEO, said: “The agreements signed with Pertamina and Chandra Asri will potentially help ADNOC to secure additional in-market presence in one of Southeast Asia’s fastest-growing economies, enabling new domestic value-creation opportunities across the hydrocarbon chain.”

“We expect that both the potential refinery development at Balongan and the direct LPG supply will allow us to optimise Indonesia’s oil and gas value chain, better serve the domestic market through our vast distribution networks across the whole archipelago and access new opportunities to meet growing global demand for petrochemical products,” said Nicke Widyawati, Pertamina president director and CEO.

In December 2019, ADNOC signed an agreement with India’s Reliance Industries Limited (RIL) to explore the development of an ethylene dichloride (EDC) facility in Ruwais, Abu Dhabi, bolstering the companies’ existing relationship to drive collaboration in petrochemicals.

Read: Abu Dhabi’s ADNOC, India’s Reliance sign up for potential JV

In 2019, ADNOC also closed a $600m pipeline infrastructure investment agreement with Singapore’s sovereign wealth fund, GIC.

Read: Abu Dhabi’s ADNOC inks $600m pipeline deal with Singapore sovereign wealth fund

Additionally, in Q4 2019, ADNOC announced plans to upgrade its Bab onshore field via a Dhs1.8bn($489m) investment to back its long-term oil production capabilities.

Read: Abu Dhabi’s ADNOC invests Dhs1.8bn to upgrade its Bab onshore field