ChemOne eyes nearly 2m tonne/yr PX output at Malaysia project

SINGAPORE (ICIS)–ChemOne expects to produce close to 2m tonnes/year of paraxylene (PX) at its $4.4bn Pengerang Energy Complex (PEC) project in Johor, Malaysia, a company executive said.

“Our focus is very much on paraxylene – that is our number one product. We’ll be operating probably at about just under 2m tonnes, say 1.9m [tonnes of PX],” PEC CEO Alwyn Bowden told ICIS.

ChemOne is a Singapore-based petrochemicals, green energy and natural resources conglomerate, while PEC is its business unit that will operate and manage the proposed Malaysia complex.

Construction of the aromatics complex will begin early next year, with start-up expected sometime in 2026.

It will be built within the Pengerang Integrated Petrochemical Complex (PIPC) – a mega project in southern Malaysia which also houses the Saudi Aramco-PETRONAS joint venture PrefChem.

The PEC project will be capable of processing 150,000 bbl/day of condensate, that will in turn produce 2.3m tonnes/year of aromatics, 3.9m tonnes/year of energy products and 50,000 tonnes/year of hydrogen.

US’ Honeywell UOP was awarded the technology licensing for the project in December 2021, with Italy’s Maire Tecnimont as the engineering, procurement, construction and commissioning partner.

Debt financing for the project, valued at approximately $3bn is anchored by five export credit agencies which have agreed to financing terms for the project.

Meanwhile, PEC has already secured the contracts for both feedstock and offtake for all products at the new complex, Bowden said, adding that all the contracts are for 12 years.

Condensate feedstock for the complex will be from the US, Australia and Qatar, he said.

“The condensates and any oil products will be supplied and taken off by just two parties – one is from Europe and the other one, is from the US,” he said.

“The aromatics [output] will be taken off by basically two parties also … both of them are Asia-based and they will be distributing to Asia and China,” Bowden said.

CHINA STILL A KEY MARKET BUT NO LONGER PRIMARY FOCUS
“When we started this process, we thought that we would focus on China and that all of our products would go into China on the aromatics side,” the PEC CEO said.

“Reality is proving to be different. As time progresses, we find that there’s demand in other areas as well, so we don’t expect to have such a reliance on China anymore,” Bowden said.

China’s import requirement for aromatics, however, is still expected to remain strong in the long term despite the slew of new mega-refineries with integrated downstream units coming stream in the next few years, he said.

“While its [aromatics imports] dipping now and it will dip further once these new capacities come online,” Bowden said.

“By the time we go into production [in 2026], it will be heading the other way – the import requirement will be growing again. So as far as we are concerned, we are entering the market at exactly the right time,” he added.

BIOFUELS, OLEFINS AS POSSIBLE ROUTE FOR EXPANSION
PEC is studying a possible route into biofuels production to reduce its carbon footprint as much as possible, the company chief said.

“We want to find ways to reduce the impact of the fuels that we do produce, so one way that can be immediately considered because we have surplus hydrogen is to look at a hydrogenated vegetable oil (HVO) plant and produce renewable jet fuel from that plant,” Bowden said.

“It gives us the opportunity to blend with our own jet fuel to create sustainable jet, and then on the other side of things, of course, once you have diesel production, you have the chance to convert it to olefins,” he added.

EFFICIENCY, SUSTAINABILITY – KEY FOR LONG-TERM SURVIVAL
As part of its long-term strategy, PEC sees the need to integrate environmental, social and governance (ESG) factors into its investment decisions and operational processes.

“Whatever you build now has to be built with a long-term view on how you fit in environmentally with the rest of the world … Unless you take that perspective then you are not going to succeed,” Bowden said.

“You can see it now with what is happening in China… those mega projects generally run off crude, and as a result of that, they have a very high carbon footprint,” he said.

“I think China has rightly looked at it and asked if they are going in the right direction, it’s a big part on why they have scaled back on what is planned for the future.”

Choosing Honeywell UOP’s technology for PEC’s Malaysia project was meant to reduce the complex’s energy requirements significantly, allowing for a lower cost of production and lower carbon footprint, Bowden said.

Interview article by Nurluqman Suratman

Thumbnail photo: At a port in Butterworth, Malaysia – 20 January 2020 (By Vincent Thian/AP/Shutterstock)

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