Upcoming Johor energy complex scores US$102b worth of feedstock supply, product off-take deals

The upcoming US$4.5 billion Pengerang Energy Complex (PEC) in Johor, Malaysia, has secured US$102 billion worth of strategic feedstock supply and product off-take agreements with several blue-chip partners.

The agreements are with leading energy majors Chevron and Equinor, Thai national oil company PTT, and marquee trading house Mitsui & Co. Combined, they will support the full needs of PEC for its initial 12 years of operation, it announced on Monday (Mar 13).

With this, PEC, a unit of the Singapore-based ChemOne Group, continues to forecast an annual export turnover of US$5 billion, propelling Malaysia further up the value chain in the petrochemical sector, it noted.

The deals were signed as the complex was expected to deliver the lowest carbon footprint per tonne of paraxylene produced of any such facility globally, when it is up and running in late 2026.

Paraxylene, or PX as it is commonly referred to, is used as a feedstock in the manufacturing of polyethylene terephthalate (PET) plastic bottles, among others.

In Monday’s statement, Alwyn Bowden, the chief executive officer of PEC, said the deals were concluded with the understanding that the facility will deliver “industry-pacesetting benchmarks”. 

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Adding that the signings “will form the cornerstone of PEC operations”, he said they “also signal the strong confidence that our various stakeholders have in the project and are set to be a catalyst for further exciting announcements and progress updates in the coming months”.

PEC is being developed by ChemOne Group and its partners. It has been designed to optimise energy efficiency, minimise equipment requirements, and has been developed in line with the International Financial Corporation’s performance standards and Equator Principles.

PEC, meanwhile, updated that the facility’s financing is expected to conclude within the next quarter as per financing terms and schedule agreed with leading global export credit agencies.

Export guarantee facilities of around US$2.5 billion were anticipated to be available to support the project, it pointed out.