Taiwan’s state-owned energy company CPC has signed a Memorandum of Understanding (MoU) with Indonesian oil and gas group Pertamina to build a naphtha cracker.

Under the terms, CPC and Pertamina will invest a total of around $6.5 billion to build the plant at a location yet to be decided in Indonesia. The two companies are expected  to each hold a 45% stake in the joint venture, with the remaining 10%  to be held by Taiwanese and foreign companies in the downstream petrochemical sector.

Tai Chein, CPC’s chairman, told Taiwan’s Central News Agency that Indonesia has given the companies a choice of five locations for the new plant but a decision will not be revealed until sometime during the first half of 2019.

CPC added that it had been planning to relocate its decommissioned naphtha cracker in Kaohsiung to Indonesia but Pertamina argued that the money could be used instead to build a new plant.

In August, Indian Oil announced that CPC was considering investing $6.6 billion in a petrochemicals complex at its refinery in Paradip, India. There has been no further progress reported on these plans to date.