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Sarawak Petchem methanol project on track

Sarawak Petchem methanol project on track

29 Aug 2022

Sarawak Petchem Sdn Bhd’s methanol plant in Tanjung Kidurong, Bintulu, is expected to be operational in the first quarter of 2024.

The project has achieved about 60% overall progress, according to company chairman Tan Sri Abdul Aziz Husain.

He said Sarawak Petchem had secured RM4bil under sukuk programme to fund the project, which was originally estimated to cost RM8bil.

Sarawak Petchem awarded the construction of the plant to Samsung Engineering Co Ltd for US$1.07bil (RM4.78bil) in 2020.

The project marked a milestone with the delivery and site installation of one of the modules last week.

The methanol plant, the pioneer project in the Sarawak Petrochemical Hub, will have production capacity of 1.75 million tonnes per annum.

State-owned Sarawak Petchem has earlier signed a sale and purchase agreement with PETRONAS Chemicals Marketing (Labuan) Ltd (PCML) to market methanol for 20 years, with an option for further extension.

PCML is the marketing arm of Petronas Chemicals Group Bhd, which is the largest methanol producer in Asia-Pacific and the fourth-largest producer in the world with an annual production capacity of 2.4 million tonnes per annum.

Sarawak Petchem is expected to receive 168 million standard cu ft of natural gas per day from the Bintulu Additional Gas Sales Facility 2 (BAGSF-2) project for the feedstock of the methanol plant.

Sarawak Premier Datuk Patinggi Abang Johari Tun Openg performed the earth-breaking ceremony for the BAGSF-2 project in Tanjung Kidurong last week.

The project is a joint collaboration between Petroliam Nasional Bhd (PETRONAS) and SEDC Energy Sdn Bhd.

According to PETRONAS president Datuk Tengku Muhammad Taufik, the BAGSF-2 project is designed with a capacity of 390 million cu ft per day of natural gas, and is scheduled to come on stream in 2023.

Tengku Muhammad said BAGSF-2 will deliver 70 million standard cu ft of gas per day to Sarawak Energy besides supplying 168 million standard cu ft of gas per day to Sarawak Petchem.

The facility will include its own dedicated administrative building, processing area, metering station and related utilities.

To faciliate the export of the methanol, a methanol jetty will be built within Bintulu Port’s water limits.

Last week, Sarawak PetChem inked a memorandum of understanding (MoU) with Bintulu Port Authority (BPA) and Bintulu Port Sdn Bhd (BPSB) to jointly collaborate on the setting up and operation of the methanol jetty.

The signatories for the MoU were Sarawak Petchem project director Mohammad Ibrahim, BPA general manager Mizool Amir Mat and Bintulu Port Holdings Bhd group chief executive officer Datuk Mohammad Medan Abdullah, who signed for BPSB.

The MoU covers 10 key areas of collaboration on the safe operations of the methanol jetty in relation to health, safety, security and environment, the establishment of marine services and jetty management system and provision of technical advisory and support.

The jetty will be used for the loading and export of Sarawak Petchem’s liquid methanol products.

Abdul Aziz said the realisation of the methanol plant project and the setting up of the Sarawak Petrochemical Hub by Sarawak State Economic Corp would be the catalyst for further growth of the state’s downstream petrochemical activities.

He said the petrochemical hub would not only be relying on methanol-based derivatives but also on other renewable energy projects to support Sarawak’s green energy agenda.

“I am confident that this methanol project will play its role in transforming Sarawak into a high-income economy by 2030,” he added.

Source: The Star

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