Refinery, petrochemical project at KIPI to contribute U$9b to GDP

The Coordinating Ministry for Economic Affairs estimates that the Integrated Refinery and Petrochemical Project developed by PT Taikun Petro Chemical would contribute an additional US$9 billion annually to Indonesia's gross domestic product (GDP). As a form of government support for accelerating investment realization, the Coordinating Ministry has signed a memorandum of understanding (MoU) with PT Taikun Petro Chemical regarding the project's investment commitments.

The signing took place in Jakarta Special Capital Region (DKI). It involved Coordinating Ministry for Economic Affairs Economic Cooperation and Investment Coordination Deputy Edi Prio Pambudi and PT Taikun Petro Chemical Director Xu Xuegen. The company is a local consortium of Chinese companies that encompass Tongkun Group, Xinfengming Group, and Tsingshan Group.

The consortium is investing nearly US$5.95 billion to construct a refinery with a capacity of 10 million tons of crude oil per year at the Kalimantan Industrial Park Indonesia (KIPI) in North Kalimantan Province. In addition to driving economic growth, the national strategic project (PSN) is also targeted to strengthen national energy security by reducing fossil fuel and petrochemical imports. It is also affected to improve state revenue and employment.

"This agreement affirms the government's commitment to create a better investment climate through streamlined licensing, fiscal incentives, and certainty of investment regulations. With this collaboration, it is expected that the project can operate optimally according to plan," said Deputy Edi as quoted on July 31, 2025.

The PSN is estimated to contribute U$140 million of additional tax revenue per year, as well as create 1,500 direct jobs and 8,000 indirect jobs for local workers. The Coordinating Ministry for Economic Affairs emphasized that it will continue to support the implementation of PSNs that would significantly benefit the national economy, including through regulatory support and a welcoming investment climate.