Kuala Lumpur, Malaysia - BASF and Petronas of Malaysia have signed a Memorandum of Understanding to undertake a joint feasibility study to produce speciality chemicals in Malaysia, a move that would extend the two parties' existing business collaboration in the country which includes a plant making butanediol used in the manufacture of polyurethane products.
The partners are considering a potential joint investment sum of about MYR 4.0 billion ($1.3 billion), according to a 6 Dec joint news release.
Under the terms of the MoU, the two parties will evaluate the technical, commercial and economic viability of jointly owning and operating world-scale facilities for the production of speciality chemicals including non-ionic surfactants, methanesulfonic acid, iso-nonanol as well as other C4-based speciality chemical products. The final scope of the investments will be determined following the outcome of the joint feasibility study which is targeted to be completed in 2011.
The MoU was signed at the PETRONAS headquarters in Kuala Lumpur. Signing on behalf of Petronas were Datuk Wan Zulkiflee Wan Ariffin, executive vice president of downstream business, and Encik Kamaruddin Zakaria, vice president of downstream operations. Dr Martin Brudermüller, member of the board of executive directors of BASF SE, responsible for Asia Pacific, and Ms Saori Dubourg, president, Asia Pacific, BASF, signed on behalf of BASF.
Datuk Wan Zulkiflee Wan Ariffin said, "The development of a new speciality chemical products portfolio is an important component of Petronas' plan to further grow the downstream petrochemical business as part of its integrated plan to be a key player in the region as well as to spur domestic investment in the oil, gas and petrochemical industries."
Brudermüller said, "With the rapid growth of chemical markets in Asia Pacific, we are further expanding our speciality chemical business. Our joint venture with PETRONAS, based on a long-standing and successful partnership, is an excellent, well-established and competitive production platform in Asia. By expanding our local production base in Malaysia, we can further improve our ability to supply our customers in Asia, from Asia." According to its Asia Pacific Strategy 2020, BASF intends to produce 70% of Asia Pacific sales in the region, with investments of €2.0 billion between 2009 and 2013.
The proposed move by Petronas and BASF will build on their successful strategic partnership in the country, established in 1997. The partnership, via BASF Petronas Chemicals Sdn Bhd (of which BASF owns 60 percent shares), currently own and operate an integrated complex in Gebeng, Pahang, Kuantan that produces acrylic monomers, oxo products and butanediol.
As for the subsequent phase of the collaboration, Petronas Chemicals Group and BASF will jointly evaluate the outcome of the joint feasibility study and will adopt it as part of their strategic growth plans, if technically and commercially viable.
Petronas is a Global Fortune 500 company wholly owned by the Government of Malaysia, principally involved in all spectrum of integrated oil, gas and petrochemical industries. For the year ended 31 March 2010, Petronas recorded a group revenue of $62.5 billion. More information on PETRONAS is available on www.petronas.com.