08 September 2010 08:59 [Source: ICIS news]
By Nurluqman Suratman
SINGAPORE (ICIS)--Malaysia's Petronas Chemicals Group is planning to expand its petrochemical production capacity and develop new plants using gas and alternative feedstock once it is listed on the Malaysian bourse, a company source said on Wednesday.
“There are plans for expansions, but those will probably be finalised after we finish the IPO (initial public offering),” the source said, without elaborating.
The newly-formed Petronas Chemicals Group is made up of 22 petrochemical-related firms within the Petronas group.
Gas and other alternative feedstock would also be increasingly used to provide better synergy within the newly-formed group's businesses and to reduce feedstock costs, said the source.
The company’s operations in Sabah and Sarawak in east Malaysia, for example, could be expanded to make full use of the abundant natural gas feedstock that is available in the region, he added.
State-owned energy firm Petronas had on 7 September filed a draft prospectus on the website of Malaysia's Securities Commission for an IPO of its entire petrochemical business.
The draft prospectus did not indicate what proportion of the share capital would be retained by Petronas, or when the listing would take place. It also did not provide details on the value of the listing.
Earlier in April, the firm said that it would list its petrochemical business on the Malaysian bourse following the Malaysian prime minister’s call for government-linked firms to divest their non-core assets.
A company source had earlier said that its listing on Bursa Malaysia was slated to be completed by the end of the year.
Petronas was planning to develop an integrated refinery and petrochemicals complex in Peninsular Malaysia to produce products, such as naphtha, that could be used as a petrochemical feedstock, the company said in the draft prospectus.
The company was also studying the possibility of developing a Greenfield ammonia and urea production facility that would be supplied with natural gas feedstock available off the coast of East Malaysia, it said.
“This project is currently at a pre-feasibility study phase, and we expect to make a final decision in fiscal year 2012 on whether to proceed with the investment,” it added.
Meanwhile, net profit from Petronas’ petrochemical business fell by 24% year on year to Malaysian ringgit (M$) 2.6bn ($830m) in the financial year ending 31 March 2010, while sales fell to M$12.2bn from M$12.4bn on a year-on-year basis, it added.
The company is one of two Petronas subsidiaries that are scheduled for listing on the Malaysian bourse this year, with Malaysia Marine and Heavy Engineering (MMHE) expected to be listed next month.
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