KUCHING: Petroliam Nasional Bhd (Petronas) has inked a heads of agreement (HoA) with Bintulu Prilled Urea Sdn Bhd (BPUSB) for potential gas supply as feedstock to a proposed petrochemical plant in Tanjung Kidurong, Bintulu.

       BPUSB is the second Sarawak firm after state-owned Sarawak Petchem Sdn Bhd to venture into the downstream petrochemical industry. Sarawak Petchem is currently building a RM3.74bil mega methanol plant in Bintulu, with the project being executed by South Korea’s Samsung Engineering Co Ltd.

       Samsung is also leading a consortium to undertake a green hydrogen and ammonia plant project in Bintulu. The plant is expected to produce 7,000 tonnes of green hydrogen per year for Sarawak’s local use. It is also projected to annually produce 600,000 tonnes of blue ammonia, 630,000 tonnes of green ammonia and 460,000 tonnes of green methanol, respectively. The consortium partners include South Korean firms Posco International Corp, Lotte Chemical and SEDC Energy Sdn Bhd, a subsidiary of the Sarawak State Economic Development Corp (SEDC).

       Petronas head of gas planning and optimisation, Malaysia Petroleum Management Zainal Abidin Zainuddin and BPUSB director Roney Zaidell signed the HoA.

       “This HoA underscores Petronas’ commitment to work with the Sarawak government. This is in expanding the domestic gas and petrochemical industry in Sarawak in accordance with the earlier principal agreement signed in 2016,” said Petronas senior vice-president of Malaysia Petroleum Management Mohamed Firouz Asnan.

       He said the HoA would support the Sarawak government’s aspiration to spur the growth of domestic economy through petrochemical development.

       “Towards this objective, Petronas with the support of the state, will continue to attract new investments to the upstream sector to ensure sustainable gas supply to all our existing and new customers,” added Mohamed.

       According to Sarawak chief minister Datuk Patinggi Abang Johari Tun Openg, the HoA marked a milestone in the development of the Sarawak’s oil and gas downstream industry.“Currently, we have two petrochemical plants in Sarawak – Asean Bintulu Fertiliser Sdn Bhd, a subsidiary of Petronas and the Shell majority-owned Shell MDS (M) Sdn Bhd. Most of the gas produced in Sarawak is exported as liquified natural gas.

       “It is the aspiration of the state government to get more Sarawak-based companies to be involved in the oil and gas downstream industry,” he said in a text of speech read by state Assistant International Trade and Industry, Industry Terminal and Entrepreneur Development Minister Datuk Naroden Majais.

       Johari said the state government is conducting a masterplan study for the development of industrial terminals which will ensure a more organised development of the downstream oil and gas activities.

       He also noted on the many challenges in the competitive, capital intensive and highly technical oil and gas downstream industry and emphasised that the state government would facilitate any such ventures to ensure their successful implementation.