The plant, which will have a production capacity of about 1.7 million tonnes per annum, will receive 160 million standard cubic feet per day of natural gas feedstock from Petroliam Nasional Bhd (Petronas), said Sarawak Chief Minister Datuk Patinggi Abang Johari Openg (pic).
The project is estimated to cost over RM8bil.
Officiating at the project’s ground-breaking ceremony yesterday, Johari said Petronas would also be involved in the project by marketing the methanol.
State-owned Sarawak Petchem inked a sale and purchase agreement with Petronas Chemicals Marketing (Labuan) Ltd (PCML) last December 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.
Johari said the methanol and derivative project is one of two Sarawak government initiatives to embark on more downstream value-adding petro-chemical industries. The other planned project is an ammonia and derivative plant.
“Sarawak is reported to hold the largest share of remaining Malaysia gas reserves at 54%, or one-third of the country’s remaining oil reserves at 29%.“We are not contended with the existing development of the oil and gas (O&G) industry in Sarawak. We will be intensively involved in developing the high-value downstream products of the O&G industry, such as specialised and fine chemicals.“In this respect, we will consider all feasible proposals to establish petro-chemical industries in the state and facilitate them accordingly,” he added.
Johari said Sarawak’s ability to attract about RM30bil in investments since the inception of the Sarawak Corridor of Renewable Energy is proof that the state is capable of venturing into the O&G industry.
Johari said the establishment of Sarawak Petchem was timely due to the abundance of natural gas as feedstock for the development of a mega methanol plant.
“This methanol project will undoubtedly be a catalyst to further transform Bintulu from the current world-renowned LNG gas producer to a petro-chemical hub with a future downstream value-added integrated petro-chemical complex.
“This will add multiple value to our natural resources and will benefit the state economically derived through its value chain.”
Johari said currently, the Sarawak economy was the third largest after Selangor and the Federal Territory of Kuala Lumpur, and that in 2018, Sarawak’s gross domestic product was RM129.7bil.
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