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Pengerang Energy Complex set to deliver new technology enabling benchmarks

Published by , Senior Editor
Hydrocarbon Engineering,


ChemOne Group, master developer of the Pengerang Energy Complex (PEC) in Malaysia, has announced engineering-driven improvements including an almost 10% increase in conversion percentage from its condensate feedstocks to its higher value aromatics products.

This will thereby deliver both improved production economics and reduced carbon footprint, underpinning PEC’s intent to deliver new benchmarks for the industry.

Honeywell UOP has completed its first phase of design-related works for the US$5 billion PEC. As a result of its initial works on the PEC project, as well as recent empirical evidence from multiple plants already in operation with its LD-PAREX™ technology, Honeywell UOP has come up with a new material balance: PEC will use the same quantities of feedstock to produce higher quantities of products. This improved conversion efficiency also delivers a further reduction in overall carbon footprint of the PEC project, supporting ChemOne Group’s strategic vision of developing, operating or investing in low carbon project developments.

The new material balance is almost 10% higher than the previous material balance with improved aromatics yield, lower off-gases, leading to a stronger increase in profitability. The existing offtake agreements for the plant have sufficient room to absorb the new quantities, therefore 100% of PEC’s capacity is still fully tied up.

With this new material balance, PEC will deliver more of its core aromatics products for the same amount of feedstock utilisation, which will lead to better EBITDA for the project. This improvement comes against a background of ongoing global uncertainty which has seen general increases in project and construction costs globally, primarily due to inflationary factors and overall project development pressures. Ultimately, this improvement has allowed PEC to navigate these pressures whilst still preserving its underlying financial fundamentals, despite an overall increase of around 9% in total project costs.

Alwyn Bowden, CEO of Pengerang Energy Complex Sdn Bhd, said: “The increased cash flow from the new material balance will not only fully absorb the impact of macroeconomic factors being felt throughout the world but also produce surplus cash flow. Therefore, all critical investment and credit ratios for the project remain intact. These latest developments have been presented to the leading global export credit agencies (ECAs) who are supporting the project and it is now anticipated that they will each go to their respective boards for final approval in the fourth quarter of 2023.”

ChemOne Group’s sustainability roadmap includes the development of a potential downstream renewable fuels facility, which will utilise byproducts from PEC along with other waste products as raw materials to produce renewable fuels including sustainable aviation fuel (SAF), hydrogen, biodiesel and other biofuels.

M. Y. Ling, Chairman and CEO of ChemOne Group, said: “Since 2019, ChemOne has been on a transformative journey towards renewable energy, driven by our vision to make a meaningful contribution to Southeast Asia’s net-zero carbon emissions targets. Central to the success of this transition is our commitment to minimising the carbon footprint of PEC, aiming to make it one of the most environmentally sustainable facilities globally. We are dedicated to setting new benchmarks for energy efficiency across all our key divisions.”

PEC is expected to sign key agreements with industrial partners that are participating in the project following finalisation, including its joint venture with its engineering, procurement, construction and commissioning (EPCC) partner which is in the last stage of finalisation.

This follows on the signing of key agreements for strategic feedstock supply and product off-take with leading energy majors Chevron and Equinor, Thai national oil company PTT, and marquee trading house Mitsui & Co. Ltd, which was concluded in March 2023. Worth a combined total of US$102 billion, these agreements will support the full needs of PEC for its initial twelve years of operation.

PEC has been designed to optimise energy efficiency, minimise equipment size, and significantly reduce carbon footprint and has been developed in line with International Financial Corp.'s (IFC) performance standards and Equator Principles 4.

During its 45-month construction phase, PEC is expected to hire over 7000 employees, and is expected to retain over 200 employees for operations and maintenance once commercial production commences.

Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/15092023/pengerang-energy-complex-set-to-deliver-new-technology-enabling-benchmarks/

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