06-03-2012

PETRONAS and BASF move ahead with expansion of partnership in Malaysia

PETRONAS and BASF have taken the next steps in the development of the previously announced €1 billion investment that will expand their partnership in Malaysia, involving projects at their existing venture in Kuantan and at a new site within PETRONAS’ proposed Refinery & Petrochemical Integrated Development (RAPID) complex in Pengerang, Johor.

These projects are to be implemented between 2015 and 2018.

The two partners today entered into a "Heads of Agreement" (HOA) for the development of the new project in Pengerang, signed by Dr. Martin Brudermueller, Vice Chairman of the Board of Executive Directors, BASF SE, and Datuk Wan Zulkiflee Wan Ariffin, Executive Vice President of Downstream Business, PETRONAS.

Under the terms of the HOA, the partners have agreed to form a new entity (BASF 60%; PETRONAS 40%) to jointly own, develop, construct and operate production facilities for isononanol, highly reactive polyisobutylene, non-ionic surfactants, methanesulfonic acid, and plants for precursor materials. These world-scale facilities will become an integral part of PETRONAS’ RAPID project.

PETRONAS - through its subsidiary PETRONAS Chemicals Group Bhd - and BASF are also making progress with the feasibility study to expand the operation of BASF PETRONAS Chemicals Sdn Bhd in Kuantan. The two partners are considering the expansion of their C3 value chain with a new plant for superabsorbent polymers, as well as the expansion of the production capacity of their existing glacial acrylic acid unit. BASF PETRONAS Chemicals (BASF 60%; PETRONAS 40%) was founded in 1997. The company currently operates an integrated complex with acrylic monomers, oxo products and butanediol production facilities at the Gebeng Industrial Zone, Pahang.

“With our new development in Pengerang and the expansion of the “Verbund” site in Kuantan, we will be able to improve supply to our customers in Asia Pacific with specialty chemicals that help meet the needs of a rapidly growing population, especially in the ASEAN market ,” said Dr. Brudermueller, who is responsible for BASF’s Asia Pacific operations. “At the same time these projects demonstrate the vitality and success of our sustainable partnership with PETRONAS.”

Datuk Wan Zulkiflee said, “ The development of a new specialty chemical products portfolio is an important component of PETRONAS' plan to facilitate the sustainable development of our downstream petrochemical business. This complements our integrated plan to become a key player in the region as well as to spur domestic investment in the oil, gas and petrochemical industries."

The chemicals to be produced at the new facilities will directly contribute to the sustainable development of the Asia Pacific region, especially in ASEAN. For example, nonionic surfactants are used in almost all cleaning applications, particularly in environmentally friendly laundry detergents as well as in technical processes, including as ingredients for auxiliaries in the textile and leather industry.

Methanesulfonic acid is utilised in many different applications wherever a strong, readily biodegradable and low-corrosive acid is needed, such as for use in detergents, electroplating, and chemical synthesis.

Isononanol is a feedstock for the production of plasticizers, which are used in a variety of industries including construction and automotive. Superabsorbent polymers are the key ingredients in disposable diapers and adult hygiene products.