MOSCOW (MRC) -- Jurong Aromatics Corp., operator of one of the world’s largest petrochemical plants, can't service its interest payments and is negotiating a debt restructuring with bankers amid a plunge in oil prices, people familiar with the matter said, according to Hydrocarbonprocessing.
Operations at the USD2.4 billion plant have been stalled since December as the Singapore-based group remains locked in talks with lenders including BNP Paribas and Standard Chartered, as well as suppliers Glencore, BP and SK Energy, the people said, asking not to be identified because the details are private.
Production began in September last year, according to Jurong Aromatics’s website, and the plant was targeting to produce 1.5 million tpy of aromatics and 2.5 million tpy of transportation fuels.
Singapore’s national plan to leverage upon its geographical position and become a regional refining hub has been dented by the recent falls in commodity prices. From the establishment in 2001 of tax breaks for trading companies to the hollowing of part of the island to store oil, the country has worked to become one of the world’s biggest energy hubs.
Jurong Aromatics had USD1.53 billion in liabilities and USD68.7 million of accumulated losses as at the end of 2013, according to the company’s latest available financial records. BP, Glencore, SK Energy have secured claims against the firm, while BNP Paribas led a USD1.73 billion loan facility in 2011 that has yet to be repaid, the records show.
As MRC wrote previously, in mid-December 2014, Jurong Aromatics Corp shut its aromatics plant in Singapore for around 30-45 days. Located in Jurong Island, Singapore, the plant has a PX production capacity of 800,000 mt/year, benzene production capacity of 400,000 mt/year and OX production capacity of 200,000 mt/year.
MRC