PETRONAS CHEMICALS TO SELL 50PC OF POLYMERS UNIT
Sale prompted by desire to share project risk amid plans for Aramco to invest in refinery in Johor
KUALA LUMPUR
PETRONAS Chemicals Group Bhd said yesterday it plans to sell 50 per cent of a polymers unit to Saudi Aramco’s wholly-owned subsidiary Aramco Overseas Holdings Coöperatief U.A. for US$900 million (RM3.8 billion).
The sale, which was done at cost, was prompted by the desire to share project risk amid plans for Aramco to invest US$7 billion in a Petronas oil refinery and petrochemical project in Johor.
“The project is still at its construction phase and the risk will remain high until the project’s completion in 2019,” said Petronas Chemicals, a unit of national oil company Petroliam Nasional Bhd (Petronas).
The deal follows on from an agreement in February in which Aramco Overseas will take 50 per cent of PRPC Refinery and Cracker from Petronas Refinery and Petrochemical Corp (PRPC).
As part of the polymers deal, Aramco will supply up to 70 per cent of the crude required by PRPC Refinery and Cracker, which will help ensure sustainable feedstock supply for the polymers unit.
Petronas Chemicals said the sale would allow it to cut its capital spending budget, provide financial flexibility to pursue other strategic growth projects and help pursue future strategic collaborations with Aramco.
In May, Petronas Chemicals said it was looking to grow aggressively in specialty chemicals to meet demand in new markets and profit from higher margins.
It said the sale would not have any material impact on its earnings for the financial year ending December this year. Reuters