CPC Corp. puts Malaysia petrochemcial project on hold
By Kathryn Chiu ,The China Post
December 7, 2013, 12:08 am TWN
TAIPEI, Taiwan -- Taking into consideration their competitiveness, CPC Corporation (CPC,中油) confirmed that its unit has shelved an investment project for a multi-billion U.S. dollar integrated refining and petrochemical complex in Pengerang, Johor in Malaysia.
CPC's subsidiary Kuokuang Petrochemical Technology Co.'s (國光石化) scrapping of plans for a refining complex in Malaysia is a disappointment for the country, which stood to reap 40 billion ringgits (US$12.39 billion) in investment from the project, the Taiwan-based Central News Agency (CNA) quoted Malaysian Deputy Prime Minister Tan Sri Mahyiddin as saying.
PC unit Kuokuang Petrochemical Technology Company's move to scrap the project was because it was no longer competitive, Bloomberg quoted a spokesman from CPC as saying.
The spokesman said the U.S. shale gas boom was pushing down the cost of petrochemicals production in the U.S. and also due to an oversupply after expanding in China.
CPC is the largest stakeholder in Kuokuang with 43 percent, while the rest of the company is held by other private Taiwanese investors.
In August 2013, Platts reported that Kuokuang scrapped plans to set up the complex in Pengerang due to poor project economics.
Platts, a news website for petrochemical professionals, reported the original plan was to use naphtha as a feedstock to produce ethylene.
However, the rise of shale gas as an alternative would make it too expensive to compete with other projects and Kuokuang would not be able to export the products, Platts reported.