APIC ’18: SE Asia to soon see new wave of downstream start-ups

KUALA LUMPUR (ICIS)–Further expansion into several downstream chemicals is well underway in southeast Asia, underpinned by mega projects in Malaysia and Vietnam.

This wave of new capacities is expected to come on stream amid a potential recalibration of trade flows due to the tariff spat between global economic superpowers China and the US, analysts said.

Singapore and Malaysia are potentially the most exposed as they are two most “open” ASEAN economies, but the latter could see possible gains in its palm oil and chemical products industries, according to Singapore-based OCBC Bank.

Vietnam could also see a possible boost in textiles and garments – key downstream markets for several heavily traded chemicals in the spot market such as monoethylene glycol (MEG) – as demand shifts away from China towards its neighbouring countries.

Under these global and regional circumstances Malaysia will host the Asia Petrochemical Industry Conference (APIC) 2018 on 20-21 August with the theme “Creating Value Through Collaboration”.

The conference is expected to attract over 2,000 attendees, the conference organiser said in a statement.

“The focus of APIC 2018 will be on technology and innovative solutions aligned with global trends which will ultimately generate future growth platforms,” said Akbar Mohd Thayoob, the president of the Malaysian Petrochemicals Association (MPA).

“These include alternative feedstocks and energy sources, improved energy storage, intelligent materials, which among others, will allow the petrochemical industry to derive unique products,” he said.

In Malaysia, BASF PETRONAS Chemicals on 16 August announced its plans to expand the production capacity of its acrylic acid and butyl acrylate plants at the firm’s Verbund site in Kuantan, Malaysia.

The new capacities are expected to come on stream in 2021, and are aimed at supporting the growing demand for acrylic monomers in the region.

The company has a 160,000 tonne/year acrylic acid plant and two acrylic esters plants with a combined capacity of 170,000 tonnes/year at the site, according to ICIS data.

The expansions follow the start-up of BASF PETRONAS’ highly reactive polyisobuene (HR-PIB) plant and its integrated aroma ingredients complex in Gebeng.

In the near term, the regional market will be paying close attention to PETRONAS’ chemical projects at its massive Pengerang Integrated Complex (PIC) in Malaysia’s southern state of Johor.

The progress at the $27bn PIC, which will house several downstream projects, stood at 85.6% as of July, said PETRONAS Chemicals Group’s managing director and CEO Sazali Hamzah.

Commercial production at the Refinery and Petrochemical Integrated Development (RAPID) project within the PIC will begin in the second half of next year, Hamzah told ICIS earlier in May.

This will include new polymer, glycol and isononanol units. The glycol plant at RAPID will be able to produce 800,000 tonnes/year of monoethylene glycol (MEG), while the INA plant will have a 250,000 tonne/year capacity.

Following the RAPID project, the next major petrochemicals expansion project in southeast Asia will be the fully-integrated Long Son Petrochemicals Project in Vietnam, which is scheduled to start operations in 2022.

The project envisages production of 1.6m tonnes/year of olefins for manufacturing high density polyethylene (HDPE), linear low density polyethylene (LLDPE) as well as polypropylene (PP).

In May, Thailand’s Siam Cement Group (SCG) reached an agreement to buy PetroVietnam’s 29% stake in Long Son Petrochemical, making it the owner of the $5.4bn project.

Earlier this month, Thailand’s PTT Global Chemical (PTTGC) said that it has signed a deal to acquire the 74% shares each of Siam Mitsui, a purified terephthalic acid (PTA) producer, and Thai PET Resin Co, which produces polyethylene terephthalate (PET).

“The investment is harmonised with the company’s business strategy that intends to expand the downstream investment and increase market potential in polymer business,” PTTGC said in a stock exchange filing.

Top image: Pertronas Towers, Kuala Lumpur where APIC 2018 is being held. Photographer: XYZ PICTURES / imageBROKER/REX/Shutterstock

Focus article by Nurluqman Suratman