Singapore-based conglomerate ChemOne Group, known for its involvement in petrochemicals, green energy, and natural resources, has unveiled significant engineering-driven enhancements for the Pengerang Energy Complex (PEC) in Malaysia. These improvements result in an impressive 10% increase in conversion efficiency, specifically from Condensate Feedstocks to higher-value Aromatics Products. The move promises improved production economics and a reduced carbon footprint, aligning with PEC’s ambition to set new industry benchmarks.
Honeywell UOP, the technology provider, has successfully completed the initial phase of design-related work for the US$5 billion PEC project. Drawing from this experience and empirical data from existing plants using LD-PAREX™ technology, Honeywell UOP has established a new material balance.
This refined balance means PEC will generate higher quantities of products from the same feedstock quantities, substantially boosting conversion efficiency and further diminishing the project’s overall carbon footprint. This supports ChemOne Group’s strategic commitment to engage in low carbon project developments, whether through development, operation, or investment.
This improved material balance, delivering an almost 10% increase in aromatics yield and lower off-gas production, translates into significantly enhanced profitability. Existing offtake agreements for PEC can accommodate the increased production, ensuring that the facility remains fully utilized.
In light of ongoing global economic uncertainty, which has led to increased project and construction costs worldwide due to inflation and project development pressures, PEC’s financial fundamentals have remained intact despite an overall cost increase of approximately 9%.
Alwyn Bowden, CEO of Pengerang Energy Complex, expressed confidence that the enhanced cash flow resulting from the new material balance will not only offset the impact of global economic factors but also generate surplus cash flow. Consequently, all essential investment and credit ratios for the project remain secure.
These developments have been presented to leading global export credit agencies (ECAs) supporting the project, and it is expected that they will seek final approval from their respective boards in the fourth quarter of 2023.
ChemOne Group’s sustainability strategy extends to potentially establishing a downstream renewable fuels facility. This facility would utilize byproducts from PEC and other waste materials as raw materials to produce renewable fuels, including Sustainable Aviation Fuel, hydrogen, biodiesel, and other biofuels.
M Y Ling, chairman and CEO of ChemOne Group, emphasized the company’s vision for PEC, highlighting its commitment to making a substantial contribution to Southeast Asia’s net-zero carbon emissions targets. PEC’s goal is to become one of the most environmentally sustainable facilities globally while setting new energy efficiency standards across its divisions.
PEC is poised to finalize key agreements with industrial partners, including its joint venture with its engineering, procurement, construction, and commissioning (EPCC) partner, currently in the final stages of negotiation. These agreements follow the signing of pivotal agreements for strategic feedstock supply and product off-take with energy giants Chevron, Equinor, Thai national oil company PTT, and trading powerhouse Mitsui & Co., Ltd., with a combined value of USD 102 billion. These agreements will fulfill PEC’s requirements for its initial twelve years of operation.
Designed to optimize energy efficiency, reduce equipment size, and significantly lower carbon emissions, PEC aligns with the International Finance Corporation’s (IFC) performance standards and Equator Principles 4.
During its 45-month construction phase, PEC is expected to provide employment for over 7,000 individuals and retain more than 200 employees for ongoing operations and maintenance once commercial production begins.