LOTTE Chemical Titan Holding Bhd (LCT) has secured a US$2.4 billion (RM10.58 billion) loan facility to fund the development works of its integrated petrochemical facility — the Lotte Chemical Indonesia New Ethylene project (LINE project).
In a press release yesterday, LCT said its unit, PT Lotte Chemical Indonesia (LCI), entered into a 12-year term loan facility with The Export-Import Bank of Korea, Korea Trade Insurance Corp and other commercial banks.
LCT holds a 51% stake in LCI, the owner of the LINE project, while Lotte Chemical Corp (LCC) holds the remaining 49%. LCC is the guarantor of the loan facility.
LCT president and CEO Park Hyun Chul said construction of the LINE project commenced in January 2022 and it is slated for completion in 2025.
“I am glad that the construction progress, thus far, is on schedule and we are confident that the LINE Project will be completed on time,” he said.
As at Jan 6, 2023, LCC and LCT had completed their portion of equity injection of US$1.6 billion into LCI, representing 40% of the capital structure.
“The completion of the loan facility for the LINE project marked an important milestone with the finalisation of the remaining capital funding for the project.
“The LINE project serves as a key strategic expansion for the group to solidify LCT’s position as a top-tier petrochemical company in South-East Asia,” Park said.
He said the project also provides synergistic advantages to the group’s three existing standalone polyethylene plants, which are in the vicinity of the project, by reducing feedstock transportation and logistics costs, as well as higher operational and cost efficiencies.
The LINE project includes the development of a cracker plant that will use naphtha and liquefied petroleum gas as its feedstock to produce, among others, 1,000 kilo tonnes per annum (KTA) of ethylene and 520KTA of propylene.
Upon completion, Park said, the production capacity of the group will increase by 65% to 5,878KTA from its existing production capacity of 3,568KTA.
“As Indonesia is a net importer of petrochemical products, the project will enable us to capitalise on the anticipated increase in demand for our products in the country,” stated Park. — TMR / pic source: LCT’s Integrated Annual Report 2021