JG Summit Petrochemical Corp.(JGSPC) has submitted a revised application to the Board of Investments (BOI) for the establishment of the country’s first naphtha cracker. Under the revised application, the company plans to source about 70% of the total project cost from loans, while the remaining 30% will be raised from equity. JGSPC - a joint venture between JG Summit Holdings Inc.(82.29%) of taipan John Gokongwei and Japanese conglomerate Marubeni Corp.(17.71%), has sought incentives from the (BOI) for its P26.25 billion naphtha cracker plant in Batangas. This naphtha cracker will complete the integration of the domestic petrochemical industry and eliminate dependence on imported feedstock.
Financial closing of the project is expected to be completed by December 2005, and the site development of a 10-hectare portion inside the JGSPC complex in Batangas is scheduled to commence in June 2006, with commercial operation scheduled by December 2008. The naphtha cracker facility would produce 318,000 tpa of ethylene; 189,000 metric tpa of propylene; 218,000 metric tons of pyrolysis gasoline; 150,000 metric tons of fuel gas; and 28,000 metric tons of fuel oil. This will be sold or transferred to JGSPC’s polyethylene and polypropylene plants, resulting in full utilization of JGSPC’s polypropylene plant with a capacity of 185,000 metric tons per year and would jack up the capacity of its polyethylene plant to 300,000 metric tons per year from 180,000 metric tons.
Under its first BOI registration approved in 1994, the cost of the project was pegged at P14.41 billion (US$514.5 million). No actual investments, however, were recorded under the 1994 registration of the naphtha cracker project. The cost has been adjusted accordingly due to change in scope of project and the prevailing exchange rate used in the projections. Under its original application, JGSPC was to start commercial operations last October 2004.