Taiwan's Kuokuang Petrochemical Technology Co has abandoned plans to set up an integrated refining and petrochemical complex in Pengerang in the Malaysian state of Johor due to poor project economics, an official from Kuokang shareholder state-owned CPC Corp. as per Platts.
"It was meant to be using naphtha as a feedstock to produce ethylene, but because of the rise of shale gas as an alternative, the costs will be too high [to compete with other projects] and we won't be able to export the products," said the official, who declined to be named.
Kuokuang had submitted an environmental impact assessment report for the project to the Malaysian government in May, but the company's shareholders had already completed their feasibility study by then, deciding not to proceed with the project, she added.
This has nothing to do with Malaysia but is based solely on the fact that the project would not be economically feasible," she said. "Right now we are waiting for the results of the report and the EIA process to be concluded. We had not proceeded beyond that so our costs were limited to just the feasibility study. We did not secure any land." The results of the EIA report are expected in the coming days.
CPC is Kuokuang's largest stakeholder with 43%, with the rest held by other private Taiwanese companies. Titled KPTC Malaysia Integrated Refinery and Petrochemical Development, or KPTC-MIRPD, the project was to have included a 150,000 bpd refinery, with development slated to begin by next year and startup scheduled for early 2018, the EIA report said. It was also expected to have the capacity to produce 800,000 m tpa of ethylene and 425,480 m tpa of propylene. Kuokuang had originally announced a new petrochemical project in Changhua, Taiwan, but that plan was scrapped last year due to environmental concerns. Then, Malaysian Prime Minister Najib Razak announced in May 2012 that Malaysia would work with Kuokuang to launch a project in the country.
04-Sep-13 
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