PNOC arm eyes 30% stake in naphtha cracker plant

The PNOC Petroleum Development Corp. (PPDC) is looking to acquire between a 30 to 34-percent stake in the country’s first naphtha cracker project, to be located in Limay, Bataan.

When commissioned, the $600-million project will have a capacity of 600,000 to 700,000 metric tons per year.

To raise the funds, PPDC’s mother firm, Philippine National Oil Co. (PNOC), will likely undertake a bond float, according to PPDC chairman Antonio A. Lopa. Lopa, who is also president and chief executive officer of PNOC, indicated that the mother unit is also interested in making an investment in the naphtha cracker plant.

He also said that the original deadline to finalize the project has been moved to 2001 instead of this year. He expressed optimism that everything would fall into place by early next year.

Earlier, PPDC and all the interested parties of the project, including the Department of Energy (DOE) signed a memorandum of agreement (MOA) sealing their commitment to undertake the project.

The other signatories to the MOA were Petron Corp., Petrochemicals Corp. of Asia-Pacific, Bataan Polyethylene Corp., Philippine Resins Industries Inc., D&L Industries Inc., Sumitomo Corp., Mitsubishi Corp., Mitsui & Co. Ltd. and Itochu Corp.

JC Summit Holdings, which was one of the original proponents, did not sign the MOA but remains interested in the project.

Meanwhile, the proponents, including the energy department, have submitted a list of incentives to the Economic Coordinating Council (ECC) for the country’s first naphtha cracker project.

Some of the sought-after incentives are: a 12-year income tax holiday; a 100-percent tax and duty exemption on imported capital equipment and spare parts; a 15-percent duty on finished plastic products until year 2010; a minimum of 15-percent duty on polymer resins; a five-percent duty on products by the naphtha cracker plant until 2010; and participants will have an option for a tariff differential of 15 percent between polymers and monomers. – Ted Torres