Malaysia's Petronas starts production at Labuan methanol plant

07 January 2011 07:48  [Source: ICIS news]

SINGAPORE (ICIS)--Malaysian state-owned oil major Petronas started production at its 660,000 tonne/year methanol unit in Labuan using clean water supplies from a new pipeline last week, company sources said on Friday.

Petronas Methanol Labuan 1 (PML1) - taken off line in 2009 due to a lack of clean water supplies - is expected to be fully functional by the end of the first quarter.

The company started production at PML1 from 24 December 2010 through an optimisation of water usage between PML1 and the 1.7m tonne/year PML 2 also in Labuan, according to a statement on its website.

PML1 was operated at 1,903 tonnes/day on 5 January, the statement added.

“There is no commercial volume as of yet and I think the current methanol produced is off-spec,” the source said.

Petronas had a backlog of term contracts to fulfil since last year and was unlikely to have spot shipments for sale in the first quarter, the source added.

The pipeline brings fresh water supply from mainland Borneo and serves both PML 1 and PML 2.

PML2 is running at around 70-80%.

“It will take some time for commercial production since the plant [PML1] was shut for so long,” said another company source.

Methanol is used to make formaldehyde, methyl tertiary butyl ether (MTBE), methylamines, methyl methacrylate (MMA) and acetic acid. It is increasingly being used in dimethyl ether (DME) and for direct blending into gasoline.

Other regional methanol producers include Indonesia’s Kaltim.

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By: Heng Hui
+65 6780 4359



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