Analysts: PCG, SPSB MoU a catalyst to Sarawak’s economic devt
KUCHING: Petronas Chemicals Group Bhd’s (PCG) memorandum of understanding (MoU) with Sarawak Petchem Sdn Bhd (SPSB) has been viewed a catalyst to Sarawak’s economic development.
Of note, PCG and SPSB signed an MoU to conduct a joint feasibility study to develop a low-carbon ammonia and urea plant in Bintulu, Sarawak.
The preliminary joint venture is a response to the rising demand for cleaner solutions for ammonia and urea, as well as to tap into the renewable energy aspirations of the Borneo region.
The plant is expected to produce ammonia with very low carbon footprint under optimised cost.
“The joint initiative is part of the economic development in Sarawak, as it is in line with Sarawak Post Covid-19 Development Strategy 2030, which aligns with its two of its key economic sectors (manufacturing and agriculture),” said the research team at MIDF Amanah Investment Bank Bhd (MIDF Research).
It also highlighted that Bintulu serves as a petrochemical and trade hub for Sarawak’s downstream chemicals and petroleum products, as well as a home to several oil and gas players and palm oil plantation companies.
“We believe that, should this joint venture materialise into a low-carbon ammonia and urea plant, employment within the coastal town will increase, subsequently giving the area a socio-economic boost,” it opined.
Aside from agricultural fertilisers, the plant is also expected to benefit many other sectors in Sarawak.
It explained that low-carbon ammonia can also be used for clean power generation via co-firing, as well as fuel for dual-engine shipping vessels and feedstock for chemical processes.
“Considering that Sarawak had begun its initiative in hydrogen fuel, ammonia can be used as a carrier, storage medium and source of the hydrogen molecules used for this fuel, further escalating Sarawak’s renewable and clean energy initiatives for both local use and regional trade,” MIDF Research said.
“All in all, we commended this collaboration, in consideration that this is a progressive step to sustain not only Sarawak’s petrochemical trade, but also to continuously support Sarawak’s efforts to add low-carbon fuel and hydrogen fuel as part of its initiatives to provide cleaner energy sources to the local and international customers.
“Pending the potential headwinds of the volatile oil market and uncertainties on petrochemical demand in the long run, we maintain positive on PCG’s ESG prospects and operational excellence in its lowcarbon gambit,” the research team said.