Pengerang Energy Complex inks deals worth US$102b
13 Mar 2023
Pengerang Energy Complex Sdn Bhd has signed key agreements with several blue-chip partners for Johor’s upcoming Pengerang Energy Complex (PEC) with a combined value totalling US$102 billion (RM457.5 billion).
The strategic feedstock supply and product off-take agreement signings with energy majors Chevron and Equinor, Thai national oil company PTT, and marquee trading house Mitsui & Co Ltd will support the full needs of PEC for its initial 12-year operation, a joint statement said.
Pengerang Energy Complex chief executive officer Alwyn Bowden said the PEC project will deliver the lowest carbon footprint per tonne of Paraxylene produced in any such facility globally when it is operational in late 2026, delivering industry pacesetting benchmarks which will allow PEC to “start with the future”.
He said it is against this backdrop that they are especially pleased to have successfully concluded negotiations on feedstock supply and off-take with like-minded and forward-thinking partners. Together, they will form the cornerstone of PEC operations, the statement said.
“These key agreement signings also signal the strong confidence that our various stakeholders have in the project and are set to be a catalyst for further announcements and progress updates in the coming months,” he said in the statement.
PEC forecasts an annual export turnover of US$5 billion, propelling Malaysia further up the value chain in the petrochemical sector.
With strong regional demand for fuels and downstream petrochemicals products, PEC’s hydrogen output holds potential for further downstream investments which will enable green initiatives such as sustainable aviation fuels (SAF), biodiesel and other biofuels.
PEC, which is being developed by Singapore-based energy and petrochemicals developer ChemOne Group and its partners, is designed to optimise energy efficiency, minimise equipment requirements, and significantly reduce carbon footprint.
Once completed, the US$4.5 billion PEC facility is set to be one of the largest, most competitive and energy and resource-efficient aromatics complexes in the world.
Financing of PEC is expected to be concluded within the next quarter as per the financing terms and schedule agreed with global export credit agencies, with export guarantee facilities of around US$2.5 billion anticipated to be available to support the project.