KNM Group, Zecon ink RM17 bln preliminary deals with Gulf Asian Petroleum for refinery and polypropylene plant

KNM Group Bhd and Zecon Bhd signed preliminary deals worth RM17 bln in total with Gulf Asian Petroleum Sdn Bhd (GAP) to build an integrated petrochemical complex in Teluk Ramunia, Johor, Malaysia. Under the deal, KNM Group and Zecon together with a Korean or Chinese contractor will form a consortium to undertake the petroleum refinery and polypropylene unit projects. The engineering, procurement, construction and commissioning contracts were for a 150,000-200,000 bpd petroleum refinery and 400,000-525,000 mln tpa polypropylene unit with a total project value of US$5 bln (RM15 bln), a RM2 bln petroleum storage terminal facility comprising four terminals with a total storage capacity of 2.328 mln cu m, as per GAP is 50%-owned by Mubadala Capital Sdn Bhd (MCSB) and the balance owned by Abdul Aziz Hamad Al-Dulaimi who is the president ofGulf Petroleum Ltd, an integrated oil and gas group based in Doha, Qatar. MCSB's controlling shareholder is Datuk Zainal Abidin Ahmad, who is also the group managing director and chief executive officer and controlling shareholder of Zecon. The consortium formed for the contract will take up to 20% equity in GAP, which is estimated at US$180 mln (RM540 mln). The petroleum refinery and polypropylene unit projects will be funded by 30% equity and the balance through project financing using export credit agencies or other financial instruments including sukuk issuance. The facilities are due for completion in 40 months from the financial close of the deal, which should be finalised within the next three months.
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