Petronas continues to ramp up polymer production

Malaysia's state-owned Petronas is continuing to ramp up polymer production at the 300,000 b/d Pengerang refinery in Johor state, ahead of its targeted start-up in November.

The refinery is a joint venture between Petronas and Saudi Arabia's state-owned Saudi Aramco. It can produce 750,000 t/yr of polyethylene and 900,000 t/yr of polypropylene.

The start-up of the facility is being keenly watched in Asia, given its size. The plant is expected to produce more volumes of on-spec polymers in November and December, with commercial output expected early next year.

The new production will make Petronas a dominant supplier in southeast Asia. Petronas is likely to aggressively target neighbouring countries, such as Indonesia and Vietnam, where it can sell at zero duty because of a regional free-trade agreement.

Petronas will be entering the polymer market during a likely period of oversupply, with new capacity scheduled to come on stream in South Korea, Oman and the US in 2020.