Indonesian President Prabowo Subianto inaugurated the New Ethylene Project, a major downstream oil and gas investment by PT Lotte Chemical Indonesia (LCI), in Cilegon, Banten, on Thursday (Nov. 6, 2025). He was accompanied by Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia, State Secretary Prasetyo Hadi, Cabinet Secretary Teddy Indra Wijaya and other senior officials.
Valued at US$3.9 billion (around IDR 62.4 trillion), the project is one of Southeast Asia’s largest petrochemical investments and Indonesia’s first naphtha cracker complex in three decades. According to a fact sheet received by CNBC Indonesia, construction began in 2016, and the facility is set to begin commercial operations in October 2025.
Once operational, the plant is expected to produce downstream oil and gas products worth US$2 billion annually US$1.4 billion in import substitution and US$600 million in export value. It processes naphtha and LPG into upstream products such as ethylene, propylene, mixed C4, pyrolysis gasoline, pyrolysis fuel oil and hydrogen, as well as downstream products including high-density polyethylene, linear low-density polyethylene, polypropylene, butadiene, benzene, toluene and xylene. These materials are essential for industries producing plastic packaging, cables, automotive components, medical equipment, synthetic rubber, tires, insecticides and paint.
The project is expected to reduce Indonesia’s reliance on imported petrochemicals, which currently meet over half of national demand. It will also create an estimated 40,000 jobs during construction and operation, strengthen local workforce capabilities through technology transfer and training, stimulate downstream industry growth and support surrounding communities through infrastructure development and CSR initiatives.
During the inauguration, President Prabowo reaffirmed his commitment to “support and protect” foreign investment, saying investor trust is vital for economic development. He stressed the need for legal certainty and a corruption-free government to ensure a conducive investment climate. Prabowo also praised former president Joko “Jokowi” Widodo for initiating the project, calling for broader appreciation of past leaders’ contributions.
The 110-hectare complex features a naphtha cracker capable of producing 1 million tonnes of ethylene and 520,000 tonnes of propylene annually. It is Indonesia’s second such facility, after PT Chandra Asri Pacific’s cracker established in 1995. Commercial operations are expected to raise Indonesia’s petrochemical self-sufficiency from 60 to 67 percent. The plant will require around 1.2 million barrels of LPG and 2 million barrels of naphtha per year, all sourced domestically.
Lotte Group chairman Shin Dong-bin said the project reflects strong Indonesia–South Korea cooperation and will enhance Indonesia’s industrial competitiveness. Minister Bahlil Lahadalia noted that the government granted a tax holiday to facilitate the investment and highlighted opportunities for future expansion, as only 70 hectares of the site are currently in use.
Energy Shift Institute analyst Ahmad Zuhdi Dwi Kusuma said the project could significantly strengthen Indonesia’s petrochemical sector but urged strict environmental management and a gradual shift toward greener energy. Meanwhile, Indef economist Andry Satrio Nugroho described the plant as a strategic addition to Indonesia’s petrochemical chain, predicting improved raw material availability, more competitive downstream industries and reduced import dependence.
November 6, 2025, The Jakarta Post, CNBC Indonesia
(https://www.cnbcindonesia.com/news/20251106105233-4-682776/prabowo-resmikan-proyek-petrokimia-rp624-triliun-terbesar-se-asean)
(https://www.thejakartapost.com/business/2025/11/06/ri-ramps-up-petrochemical-drive-as-prabowo-inaugurates-lotte-plant.html)