Malaysia’s Sarawak state lets contract for new methanol plant

June 8, 2021
Sarawak Petchem Sdn. Bhd has let a contract to a division of Air Liquide SA to license process technology for a grassroots methanol plant now under development at Bintulu, Sarawak.

Sarawak Petchem Sdn. Bhd.—an oil and gas firm established and owned by Malaysia’s Sarawak state government—has let a contract to a division of Air Liquide SA to license process technology for a grassroots methanol plant now under development at Bintulu, Sarawak, eastern Malaysia.

As part of the June 7 contract, Air Liquide Engineering & Construction will deliver licensing of its proprietary Lurgi MegaMethanol technology for the planned 5,000-tonne/day (1.7-million tonne/year) methanol plant, Air Liquide said.

Alongside technology licensing, engineering services, and related equipment for the methanol unit, Air Liquide’s scope of delivery under the contract includes an air separation unit that will have capacity to produce 2,200 tonnes/day of oxygen, the service provider said.

This latest contract for the project follows Sarawak Petchem’s previous award of a $1.07-billion contract to Samsung Engineering Co. Ltd. to provide licensing, engineering, procurement, construction, and commissioning (LEPCC) services for the proposed Sarawak methanol project, according to a Nov. 30, 2020, release from Samsung Engineering. The LEPCC contract followed Sarawak Petchem’s contract awards for front-end engineering design (FEED) and first early works to Samsung Engineering in April 2019 and November 2019, respectively, Samsung Engineering said.

Partners in codeveloping the project from its prefeasibility study stage, Air Liquide and Samsung Engineering said they expect Sarawak Petchem’s methanol plant to enter operation by late 2023.

Project background

Formed in June 2017 as part of Sarawak state’s plan to monetize its natural gas resources and expand Bintulu’s downstream industrial sector, Sarawak Petchem launched preliminary construction activities for the methanol plant project in September 2019 in Tanjung Kidurong, 15 km northeast of Bintulu. The plant’s site is part of 1,068 acres the state government acquired for development of its proposed Sarawak petrochemical hub (SPH).

While Sarawak Petchem’s project will remain independent from Malaysia’s Petroliam Nasional Bhd. (Petronas), Petronas will supply the proposed methanol plant 140-160 MMcfd of natural gas feedstock.

Sarawak Petchem in December 2018 also entered a deal with Petronas Chemicals Marketing (Labuan) Ltd. (PCML)—a subsidiary of Petronas Chemicals Group Bhd. (PCG), the Asia Pacific’s largest methanol producer—under which PCML will market methanol products from the Sarawak methanol project for at least 20 years,

Now under active development, Sarawak Petchem’s methanol project will be the first plant in the SPH, which will be developed and managed by Sarawak Economic Development Corp., the state government said. Alongside the methanol plant, other potential projects for the SPH include plants for production of ammonia, hydrogen, methanol derivatives, monoethylene, propylene, among others, according to the government.

A timeframe for full development of the SPH has yet to be disclosed.

About the Author

Robert Brelsford | Downstream Editor

Robert Brelsford joined Oil & Gas Journal in October 2013 as downstream technology editor after 8 years as a crude oil price and news reporter on spot crude transactions at the US Gulf Coast, West Coast, Canadian, and Latin American markets. He holds a BA (2000) in English from Rice University and an MS (2003) in education and social policy from Northwestern University.