MALAYSIA: Plans to spend USD 4 billion over next 5 years

Petronas Chemicals Group, a unit of Malaysia's state-run oil-and-gas company Petroliam Nasional, or Petronas, plans to spend USD 4 billion over the next five years, channeling the bulk of the cash to a mammoth petrochemical project in the southern state of Johor.

The planned expenditure is in line with its parent's commitment to continue with the Refinery and Petrochemical Integrated Development, also known as the Rapid project, even as it faces tough business conditions in 2016 amid low crude oil prices. Apart from Rapid, other key projects for this year include construction of a specialty chemical plant in the eastern Malaysian state of Pahang, said Petronas Chemicals chief executive Sazali Hamzah. The company is also building a plant that will produce polyisobutene, he added. "Many companies will tend to back off from capital investments, stopping or shelving some of their projects," Sazali said. "(But) with our strong cash position, we have the advantage to fund our existing projects and growth projects as well."

Despite dwindling earnings and global oil glut, Petronas is pushing ahead with the massive USD 27 billion Rapid project to expand further into specialty chemicals business that typically commands higher margins than other downstream products.

The complex includes a deep-water port and petrochemical and gas-import facilities, making it more of an integrated industrial complex. It will also house petrochemicals and polymer plants with a production capacity of nearly 3.5 million tons of differentiated and highly-specialized products.

Source: Daily “Nikkei Asian Review”, Tokyo; 3 Mar 2016
(Syed Rashid Ali, Karachi, Pakistan)