Malaysia's PETRONAS still unable to restart No 2 methanol plant

05 July 2011 10:03  [Source: ICIS news]

SINGAPORE (ICIS)--Malaysia’s state-owned oil giant PETRONAS is still trying to restart its 1.7m tonne/year No 2 methanol plant at Labuan in Sabah, a source from the company’s marketing arm, PETRONAS Chemicals Marketing (PCM), said on Tuesday.

“I have no idea when the restart would be successful,” the source said.

The source also disputed claims that the Japan earthquake in March had caused sea plates to move up by about 24m and had caused stress to pipelines that transport feedstock natural gas to the plant.

“That is the most convincing rumour I have ever heard but it is not correct,” he said. “If that was true, all the pipelines under the sea offshore in Sabah and surrounding areas would all be affected. This would have affected not just our methanol plant.”

Plant operations were halted in the second week of June as supply of feedstock natural gas was disrupted because of maintenance at some gas fields in Sabah.

The source explained the plant was not able to run as the pipelines were leaking. The source did not give the reasons for the leakage except for the fact it was linked to  upstream maintenance by the gas producers.

He also said that the engineers are trying to repair the existing leaking pipelines and there are no plans to build new ones for now.

The company might decide to shut the plant if the repaired pipelines can only supply a small amount of natural gas, the source added.

“[It is better to shut the plant as] this concerns the safety of the plant and some parts may require a minimum level of efficiency to operate. It may also affect the catalyst if only low operating rates can be achieved,” he said.

PCM has managed to procure some spot material from the Middle East at a floating point price based on publication values, according to the source.

The PCM source earlier said that the company has reduced its obligations to southeast Asia to the minimal contractual quantities.

Other regional methanol producers include Indonesia’s Kaltim and Brunei Methanol Company.

For more on methanol, visit ICIS chemical intelligence
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By: Heng Hui
+65 6780 4359

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