PRLog (Press Release) -
Feb 06, 2010 -
According to BMI's latest Malaysia Petrochemicals Report, the exploitation of Malaysia's substantial gas reserves offers the country's petrochemical industry a supply of competitively-
priced ethane feedstock that will fuel growth and help it reach the objectives of the Third Industrial Development Plan, which includes three new crackers by 2020. In 2008, Malaysia had 2.89mn tonnes per annum (tpa) of olefins production capacity, of which 1.77mn tpa was ethylene and 1.12mn tpa was propylene. Polymer production capacities include 975,000tpa of PE, 560,000tpa of PP, 215,000tpa of PET and 260,000tpa of PVC. Aromatics production capacities include 330,000tpa of benzene, 100,000tpa of butadiene, 220,000tpa of ethylbenzene, 70,000tpa of toluene and 550,000tpa of paraxylene. Derivative and intermediates include 1.77mn tpa of methanol and 600,000tpa of terephthalic acid. The Malaysian petrochemicals sector has been growing at an impressive pace. The government's investor-friendly policies and easy availability of feedstock have been chiefly responsible for this growth. The most notable development in 2008 was the completion of a 1.7mn tpa methanol plant, which Petronas subsidiary Petronas Methanol (Labuan) bought in Q308. There are few major expansions in the Malaysian petrochemical sector planned over the next five years. In April 2008, the Malaysian government approved a US$4-5bn refining and petrochemical project by a consortium led by Qatari oil and gas company Gulf Petroleum. The proposed complex will be developed in three stages at Manjung in the state of Perak, northern Malaysia, and will include a 100,000- 150,000b/d refinery, a US$1.5-2.0bn petrochemical complex and US$1bn of storage facilities. The Manjung complex is expected to become Gulf Petroleum's production hub for Asia, but by late 2008 capacities and a time-scale for completion had not been announced. BMI does not envisage it coming onstream before 2013. In the short term, overcoming feedstock shortages and mechanical hitches are likely to be at the forefront of operators' agendas. The utilisation of the country's considerable ethane reserves is crucial to maintaining competitiveness. This will be bolstered by the development of its liquefied natural gas (LNG) sector. The use of naphtha as feedstock has resulted in unstable feedstock prices, and thus affected petrochemical demand in the domestic market. Such a situation would continue until the prices stabilise, in spite of the vast domestic reserves that Malaysia holds. Malaysia ranks sixth in BMI's Petrochemicals Business Environment Rankings for Asia, 1.1 points ahead of Thailand and 7.4 points behind Singapore. While it has a significant petrochemicals production base, it lags in terms of infrastructure. Nevertheless, oil and gas reserves should sustain some expansion of the country's petrochemicals sector over the next decade.
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