Malaysia’s PEC to soon award EPC contract for new complex – CEO

SINGAPORE (ICIS)–ChemOne will soon award the engineering, procurement and construction (EPC) contract for the conglomerate’s $5bn Pengerang Energy Complex in Malaysia, the CEO of the project’s operator said on Wednesday.

The EPC deal will likely be announced “in the next few weeks”, Alwyn Bowden, the CEO of Pengerang Energy Complex Sdn Bhd (PEC) told ICIS on the sidelines of the Asian Downstream Summit in Singapore.

PEC is ChemOne’s business unit that will operate and manage the proposed petrochemical complex in Johor, Malaysia.

The EPC announcement will come ahead of the project’s financial closing which is on track to be concluded by the end of this year, Bowden said.

The PEC project, scheduled to enter into operations in late 2026-2027, is expected to produce around 2m tonnes/year of paraxylene (PX).

The PEC project will be capable of processing 150,000 bbl/day of condensate plus side feed of naphtha, which will, in turn, produce 2.3m tonnes/year of aromatics, 3.9m tonnes/year of energy products and 50,000 tonnes/year of hydrogen.

The project first announced in early 2020 was delayed from its original start-up timeline of Q4 2022, and the cost has gone up from the initial estimate of $3.4bn.

The project investment has increased significantly since its inception, mostly due to procurement and financial costs which have risen due to higher interest rates, Bowden said.

The financial closing for the company’s other project to process the output from PEC to produce renewable fuels will likely be “a year behind” the initial one that is expected by this year.

The company aims to use the hydrogen produced from the complex to produce hydrogenated vegetable oil (HVO), which in turn can be processed further into sustainable energy fuel (SAF).

The Asian Downstream Summit is part of the Singapore International Energy Week (SIEW) 2023 which runs on 23-27 October.

Interview article by Nurluqman Suratman