Green light for US$2.8B petrochemical complex
By Siti Hajar

His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam has consented to the establishment of a second petrochemical complex that will bring with it several downstream industries and jobs that aim to significantly contribute to Brunei Darussalam's overall development.

The US$2.8 billion integrated gas-based petrochemical complex investment, situated on a 90-hectare site of the 271-hectare area, will be located at the Sungai Liang Industrial Park (Spark), currently developed and managed by the Sungai Liang Authority (SLA).

Locating the complex in the industrial area, said the SLA in a press statement released by the Brunei Economic and Development Board yesterday, "will significantly contribute to Spark's continuous development, bringing the occupancy rate to approximately 75 per cent of Spark's leasable land".

It is expected to involve the development of six downstream plants namely ammonia, urea, di-ammonium phosphate, ammonium sulphate, melamine and caprolactam, which will allow the facilities to produce chemicals for the production of fertilisers, textiles as well as plastics.

The statement further explained that the project would be undertaken by a leading Japanese Consortium known as Mitsui Consortium that comprises Mitsui & Co Ltd and Mitsui Chemicals Inc.

The Japanese company was awarded the tender following an international Request for Proposals process carried out by BEDB in November 2009 for the utilisation of 0.5tcf of Brunei's natural gas and evaluated by the world's leading consultancy firm Wood Mackenzie.

Apart from improving Brunei's image in the international market, the products produced by this new plant will add to the country's export portfolio and subsequently generate income away from oil and gas, said a source with knowledge of the project.

Coupled with the US$2.5 billion oil refinery and cracker plant to be situated at Pulau Muara Besar, the development of this up and coming petrochemical complex, added the source, will complement the first similar establishment due to their capabilities in "producing different products".

To further benefit the country from a financial perspective, the Japanese Consortium has also offered a local equity participation of up to 49 per cent in this project.

Subject to further availability of natural gas, other gas-based petrochemical proposals are also being evaluated for consideration, BEDB further stated.

The negotiation for the gas supply is expected to be carried out concurrently, said the statement.

As a major part of the due diligence process, the BEDB, together with the Energy Department at the Prime Minister's Office and the SLA, recently conducted a visit to Mitsui & Co Ltd in Tokyo and also a site visit to Mitsui Chemical's ammonia/urea and melamine plants in Osaka, Japan, the statement further said.

A detailed engineering study, whose exact date was not disclosed, will be carried out for approximately 12 months prior to the construction of the plants.

Brunei's human resource capabilities will also be enhanced through this project, which will create some 470 employment opportunities, as the consortium will also offer post-graduate scholarships for local Bruneians as a means to upgrade their technical skills in relevant fields.

As one of the downstream plants will produce fertiliser, which can be useful for Brunei Darussalam's self-sufficiency in food ambition, a portion of the production of agricultural fertilisers will be reserved at no cost for His Majesty's Government for domestic consumption, said BEDB.

Dato Paduka Awg Haji Ali Haji Apong, Deputy Minister at the Prime Minister's Office and also Chairman of the BEDB, said, "The BEDB will continue to work very closely with Mitsui Consortium and other relevant stakeholders towards the successful implementation of the project.

"It is hoped that the successful development of the project will crystallise Brunei's ambition to be a world class petrochemical hub. Mitsui Consortium is also committed to introducing key Japanese companies to Brunei particularly in the food and pharmaceuticals sectors." - Borneo Bulletin (30th August 2011)