Pengerang Energy Complex to receive US$2.4 bln funding by year-end, says ChemOne
20 Jun 2022
ChemOne Group has announced that the Pengerang Energy Complex (PEC) project is on track to receive export guarantee facilities of around US$2.4 billion (US$1=RM4.40) by the end of the year.
In a statement today, ChemOne, which is the master developer of the project, said the PEC would complete its financial closing in late 2022 as per financing terms and schedule agreed with leading global export credit agencies.
“Slated to start construction in the fourth quarter of this year, the US$4.4 billion PEC facility will be located in the Pengerang Integrated Petroleum Complex (PIPC), Johor, centrally located to access core international feedstock sources and to supply key product demand centres in Asia,” said ChemOne, which is a Singapore-based petrochemical, green energy and natural resources conglomerate.
PEC has been designed to optimise energy efficiency, minimise equipment size, and significantly reduce carbon footprint and has been developed in line with International Financial Corporation’s performance standards and Equator Principles 4.
The group also said that the PEC has also secured long-term offtake commitments from blue-chip energy players in the industry for all its products.
ChemOne group chairman and chief executive officer M. Y. Ling said through the PEC, ChemOne aims to create a sustainable and energy-efficient state-of-the-art aromatics complex within Southeast Asia to serve the wider Asian market.
The senior debt financing for the project, estimated to be approximately US$2.9 billion, has also been launched into syndication this month and is expected to be concluded within six weeks, he said.
PEC is on track to conclude several key agreements with industrial partners that are participating in the project, along with a joint venture and engineering, procurement, construction and commissioning partner, Italian group Maire Tecnimont S.p.A.
PEC has awarded Honeywell UOP the technology licensing contract for the project, which will incorporate Honeywell UOP’s latest generation LD Parex technology.
“Honeywell UOP’s market-leading advanced aromatics processing technologies will result in reduced energy consumption, maximised aromatics production, lowered capital and energy costs and wider feedstock flexibility, allowing the PEC plant to become one of the most advanced, energy and carbon-efficient facilities in its class,” said Ling.
The project is slated to be fully operational in 2026, and will be capable of processing 150,000 barrels per day (bpd) of condensate plus a side-feed of naphtha, which will, in turn, produce aromatics of 2.3 million metric tonnes per annum (mmtpa), energy products output of 3.9 mmtpa and hydrogen output of 50,000 metric tonnes per annum (mtpa).
The condensate splitter will produce heavy naphtha, a primary feedstock for the aromatics plant, and the hydrogen produced is planned to be used to develop downstream renewable fuel facilities in Johor.
Pengerang Energy Complex Sdn Bhd chief executive officer Alwyn Bowden noted the significant progress seen for the project, particularly in the last six months.
“With regional markets opening up, we hope to gain even further momentum as we gear up to commence construction.
“The deals that have been inked thus far highlight our stakeholder’s strong confidence in the project. Within the next couple of months, we expect to conclude negotiations and sign agreements with leading global energy companies and oil majors for feedstock and offtake,” he said.
PEC expects an annual export turnover of US$5 billion, propelling Malaysia further up the value chain in the petrochemical sector.
It is planned to receive its long-term feedstock supplies from major international oil companies, while leading European, American, Japanese, Chinese and Thai petrochemical players have committed to off-take the products.
During its 45-month construction phase, PEC is expected to hire over 7,000 employees and is expected to retain over 200 employees for operations and maintenance once commercial production commences.