Malaysia’s PEC eyes final investment decision for Johor complex in H2 – CEO

Pearl Bantillo


SINGAPORE (ICIS)–Malaysia’s Pengerang Energy Complex Sdn Bhd (PEC) expects to make a final investment decision (FID) on its $4.5bn petrochemical project in Johor in the second half of the year, when project financing is expected to be finalised, its CEO Alwyn Bowden told ICIS on Friday.

“Equity portion is led by ChemOne Group along with its strategic partners,” Bowden said in an e-mailed response to ICIS queries.

ChemOne is a Singapore-based petrochemicals, green energy and natural resources conglomerate. It had developed and arranged financing for Singapore’s Jurong Aromatics Complex, whose plant started up in 2014 and was eventually acquired by US energy giant ExxonMobil in 2017.

PEC is ChemOne’s business unit that will operate and manage the proposed petrochemical complex in Johor.

“The equity funding breakdown for the project will be disclosed upon financial investment decision (FID) in second half of 2023,” Bowden said.

“The debt financing for the project launched into syndication in 2022 and the FID of the PEC is expected to conclude within this year as per financing terms and schedule agreed with leading Global Export Credit Agencies (ECAs), with export guarantee facilities close to $3bn to be available to support the project,” the PEC chief said.

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

“Engineering works for the Pengerang Energy Complex (PEC) is currently underway and the project is slated to be fully operational by late 2026,” Bowden said.

The project is expected to produce around 2m tonnes/year of paraxylene (PX), whose main downstream industry is textiles.

“From 2026, there will be a lot of traditional downstream capacity which will require paraxylene and there is also an inflection point predicted for China’s import requirements,” Bowden said.

The project first announced in early 2020 was delayed from its original start-up timeline of Q4 2022, and the cost has gone up from the initial estimate of $3.4bn.

“During the project finance phase, the world has experienced record oil price fluctuations, a global pandemic and geopolitical conflict. Each one of these events has required PEC to re-analyse the project completely to ensure the project is structured in a way that can withstand such events and remain profitable at every level,” Bowden said.

“Despite these events creating obstacles and causing delays, it has helped the PEC to futureproof the profitability of the project,” he added.

Interview article by Pearl Bantillo

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