BASF partners PetChem for isononanol plant in Pengerang

INA technology transfer to PetChem will be the 1st time BASF has granteda production technology licence to a 3rd-party


BASF SE has partnered Petronas Chemicals Group Bhd (PetChem) to develop the latter’s US$442 million (RM1.9 billion) isononanol (INA) plant at the Pengerang Integrated Complex (PIC) in Johor.

Under the partnership, the Germany-based chemicals giant will provide its licensed INA production technology to PetChem, according to a PetChem senior official.

The INA technology transfer to PetChem will be the first time BASF has granted a production

Abdul Aziz says specialty chemicals will be one of the core revenue generators for the group

technology licence to a third-party. “The award of the INA technology licence can be considered part of BASF’s business participation in the partnership,” PetChem strategic planning and ventures head Abdul Aziz Othman told The Malaysian Reserve in an email reply.

The chemicals arm of Petroliam Nasional Bhd (Petronas) and BASF have a long working relationship.

PetChem and BASF have a joint-venture (JV) firm, BASF Petronas Chemicals Sdn Bhd, which operates the integrated petrochemical complex in Gebeng, Pahang, involving investment of over RM5.4 billion.

Abdul Aziz said BASF and Petronas are long-term strategic partners and both parties have been seeking to strengthen and expand the partnership.

“The INA licence award is a testament to the strong relationship and BASF’s confidence in PetChem as the leading integrated chemicals producer in Malaysia and one of the largest in South-East Asia.”

The INA plant, which will enhance PetChem’s production of niche chemical products, is expected to be operational in the second-half of 2019.

Niche chemicals productions are generally controlled and marketed by technology owners and rarely shared with third parties.

To date, BASF’s INA licence has been awarded to its JV with China Petroleum and Chemical Corp or Sinopec Group in Maoming, China.

When operational in 2019, Abdul Aziz said PetChem’s INA plant in PIC will market the chemical for the Asia- Pacific market.

“We are capitalising on Malaysia’s strategic location in the region and the edge for us to be the market leader,” he said.

Abdul Aziz said specialty chemicals will be one of the core revenue generators for the group.

Opportunities in the chemical segment will ensure PetChem’s growth in the global chemicals industry value pool and maintain its competitiveness against other international chemical companies.

He said both basic and specialty chemicals account for equal demand for the overall chemicals industry.

For the next 20 years, the value pool is forecast to increase nearly twofold, driven mainly by the robust demand from South-East Asia and China.

Texas-based Fluor Corp earlier this month announced that it was awarded an engineering, procurement and construction management (EPCM) contract by Petronas Refinery and Petrochemical Corp Sdn Bhd for an isononanol plant in Pengerang, Johor. Fluor will book the undisclosed contract value in the third-quarter of 2017.

The INA project is part of Petronas’ Refinery and Petrochemical Integrated Development (Rapid) project and the mammoth US$27 billion PIC development.

The INA facility will produce 250,000 tonnes of isononanol annually. It is the key chemical in plasticisers used in the automotive and building industries.

Fluor, together with Technip, are the among the consultants for the Rapid project, as well as the EPCM contractor for the utilities, interconnecting and offsites scope.