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Sarawak Petchem methanol project on track

KUCHING: 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 secured RM4bil under the sukuk scheme to fund the project, which was initially estimated at RM8bil.

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

The project marked an important milestone with the delivery and on-site installation of one of the modules last week.

The methanol plant, a pioneering project of the Sarawak Petrochemical Hub, will have a production capacity of 1.75 million tonnes per year.

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

PCML is the marketing arm of Petronas Chemicals Group Bhdwhich is the largest methanol producer in Asia-Pacific and the world’s fourth largest producer with an annual production capacity of 2.4 million tons per year.

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

Sarawak Prime Minister Datuk Patinggi Abang Johari Tun Openg held the groundbreaking ceremony for the BAGSF-2 project at Tanjung Kidurong last week.

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

According to PETRONAS Chairman Datuk Tengku Muhammad Taufik, the BAGSF-2 project is designed with a capacity of 390 million cubic feet per day of natural gas and is expected to enter service in 2023.

Tengku Muhammad said BAGSF-2 will supply 70 million standard cubic feet of gas per day to Sarawak Energy in addition to supplying 168 million standard cubic feet of gas per day to Sarawak Petchem.

The facility will include its own dedicated administration building, processing area, meter station and associated utilities.

To facilitate the export of methanol, a methanol jetty will be constructed within the water limits of Bintulu Port.

Last week, Sarawak PetChem signed a Memorandum of Understanding with Bintulu Port Authority (BPA) and Bintulu Port Sdn Bhd (BPSB) to jointly collaborate in the establishment and operation of the methanol jetty.

Signatories to the MoU were Sarawak Petchem Project Manager Mohammad Ibrahim, BPA Managing Director Mizool Amir Mat, and Bintulu Port Holdings Bhd. group chief executive Datuk Mohammad Medan Abdullah, who signed for BPSB.

The MoU covers 10 key areas of collaboration on the safe operation of the methanol jetty with respect to health, safety, security and the environment, the establishment of maritime services and a system jetty management and the provision of technical advice and support.

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

Abdul Aziz said the completion of the methanol plant project and the establishment of the Sarawak Petrochemical Hub by Sarawak State Economic Corp would be the catalyst for further growth in the state’s downstream petrochemical business.

He said the petrochemical center will not only rely on methanol derivatives but also other renewable energy projects to support Sarawak’s green energy program.

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