Singapore-based petrochemicals, green energy and natural resources conglomerate, ChemOne Group, master developer of the Pengerang Energy Complex (PEC), has announced that PEC is on track to complete its financial closing in late 2022 as per financing terms and schedule agreed with leading Global export credit agencies (ECAs), with export guarantee facilities of around USD 2.4 billion anticipated to be available to support the project.
PEC has been designed to optimize energy efficiency, minimize equipment size, and significantly reduce carbon footprint and has been developed in line with International Financial Corporation’s (IFC) performance standards and Equator Principles 4.
Slated to start construction in the fourth quarter of this year, the US$4.4 billion (approximately SG$6.12 billion) PEC facility will be located within the Malaysia Federal and Johor State Government supported dedicated Pengerang Integrated Petroleum Complex (PIPC), centrally located to access core international feedstock sources and to supply key product demand centres in Asia. PEC has secured long-term offtake commitments from blue-chip energy players in the industry for all its products.
M Y Ling, Chairman and CEO of ChemOne Group, shared his vision for PEC, saying: “As Asia drives strong regional demand for fuels and downstream petrochemicals products, growth is projected to continue to outpace capacity. Through 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.
PEC is on track to conclude several key agreements with industrial partners that are participating in the project, along with joint venture and engineering, procurement, construction and commissioning partner, 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.
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 side feed of naphtha, that 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 hydrogen produced is planned to be used to develop downstream renewable fuels facilities in Johor.
Alwyn Bowden, CEO of Pengerang Energy Complex Sdn Bhd, said: “We have seen significant progress for PEC, particularly in the last six months. Now, 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”.
PEC forecasts 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.