MOSCOW (MRC) -- Malaysia’s Petronas Chemicals Group Bhd (PCG) said on Monday it has sold 50% of a polymers unit to Saudi Aramco’s wholly owned subsidiary, Aramco Overseas Holdings Cooperatief U.A. for USD900 million, as per DealStreetAsia.
The sale, which was done at cost, was prompted by the desire to share project risk amid plans for Saudi Aramco to invest USD7 billion into a Petronas oil refinery and petrochemical project in Malaysia’s southern state of Johor.
"The project is still at construction phase and the risk will remain high until project completion in 2019," said PCG, a unit of national oil company Petroliam Nasional Bhd (Petronas) , said in a statement.
The deal follows on from an agreement in February in which Aramco Overseas will take 50% of PRPC Refinery and Cracker from Petronas Refinery and Petrochemical Corporation (PRPC). As part of the polymers deal, Saudi Aramco will supply up to 70% of the crude required by PRPC Refinery and Cracker which will help ensure sustainable feedstock supply for the polymers unit.
PCG said the sale would allow it to cut its capital spending budget, provide it with the financial flexibility to pursue other strategic growth projects and help it pursue future strategic collaborations with Saudi Aramco.
In May, PCG told Reuters that it is looking to grow aggressively in specialty chemicals to meet demand in new regional markets and profit from higher margins. PCG said the sale will not have any material impact on its earnings for the financial year ending December 2017.
As MRC informed before, in early 2017, Petronas said its new USD27 billion refining and petrochemical complex project in the southeast Asian country is on track for start-up in 2019. Thus, Petronas plans to build a C6-based metallocene linear LDPE plant and a low density polyethylene (LDPE)/ethylene vinyl acetate (EVA) swing plant at its greenfield integrated refinery and petrochemical complex in southern Johor state by mid-2019. The proposed metallocene LLDPE will have a capacity of 350,000 tpa, while the LDPE/EVA will have a capacity of about 150,000 tpa. The two plants are part of Petronas' planned Refinery and Petrochemical Integrated Development project in Pengerang at Johor.
Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
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