KUALA LUMPUR: The chemicals arm of Malaysia's state energy firm Petronas plans to spend roughly US$6 billion over the next 15 to 20 years to expand its speciality chemicals portfolio through acquisitions and partnerships, the unit's chief executive said on Monday (Jun 24).
The budget is part of Petronas Chemicals Group Bhd's efforts to make high-margin speciality chemicals a central part of its business, Sazali Hamzah said in an interview with Reuters at the Asia Oil & Gas Conference.
"By doing that we are going to diversify our portfolio and our dependency on crude and gas will be a lot less," he said.
Petronas Chemicals has been looking to grow rapidly in speciality chemicals, which are raw materials used to manufacture consumer products such as high-performance tyres, medical gloves and LED televisions.
Other major oil companies such as Saudi Aramco have also been expanding into petrochemicals in recent years to diversify from crude oil production.
In May, Petronas Chemicals acquired Netherlands-based Da Vinci Group BV for 163 million euros (US$186 million) in the first acquisition of its speciality chemicals push.
An immediate growth area for the company is the Refinery and Petrochemical Integrated Development (RAPID) business, a 50-50 partnership with Saudi Aramco in the southern Malaysian state of Johor.
RAPID, which is part of Petronas' US$27 billion Pengerang Integrated Complex, will contain a 300,000 barrels-per-day oil refinery and a petrochemical complex with a production capacity of 7.7 million metric tonnes per year.
Petronas Chemicals is spearheading the petrochemicals component of RAPID, which is expected to start commercial operations in the fourth quarter.
Sazali said Petronas Chemicals had lined up customers for products from RAPID - mostly from South East Asia, but also from China, Japan and South Korea.
The company is studying further expansion of the petrochemicals operations in Pengerang, he said.
"We are focused on Pengerang because it has all the facilities for future growth. We are now doing studies with a few potential partners," Sazali said.
The company is budgeting another US$6-US$7 billion over 20 years for expansion in Pengerang and existing Malaysian operations in Kerteh and Kedah, he said.