PNOC eyes tie-up with Petronas for naphtha plant

The Philippine National Oil Co. (PNOC) is preparing to form a joint venture company with Petronas of Malaysia and other interested parties for the $600 million naphtha cracker project by June this year.

"We are now in the detailed feasibility study which will be finished by the end of June. That will determine with finality the feasibility of the project that includes equity," PNOC president and chief executive officer Thelmo Y. Cunanan said.

Cunanan said Petronas is one of the firms that has expressed its intention to invest in the naphtha cracker plant.

But Cunanan said Petronas is still awaiting the result of the feasibility study before it could firm up any investment in the project.

"By the end of June, we can finalize everything and go into forming a joint venture company here for the cracker. From the beginning, Petronas wants one-third if there is no one else, but I am sure there is. But I’m quite confident that Brunei would come in. There could be a three way, 30 percent. I’m confident that could push through," he said.

After the completion of the feasibility study, Cunanan said they will start to issue information memorandum for the financial aspect of the project.

According to Cunanan, they have also conducted a three-company swing in Brunei, Malaysia and Indonesia to explore possible joint cooperation in these countries.

"In Indonesia, we have met with Pertamina’s joint steering committee. We are exploring possible joint cooperation in the areas of the upstream, which is exploration and production and the downstream, which is the petrochemical and geothermal. In that committee, we have three technical working groups for the upstream, downstream and geothermal," he said.

However, he said they were not able to get firm commitments yet from the Brunei government. "In Brunei, it has just organized its own Brunei National Oil Co. (BNOC). We want them to finish their reorganization before we talk to them," he said.

Cunanan expressed confidence that the Brunei government is willing to take part in the naphtha cracker project but is still awaiting the formation of BNOC. "I am confident, though, that they would want to be part of the project. As a matter of fact, we will go there next week to discuss this matter further" he added.

The naphtha cracker project, to be constructed in Mariveles, Bataan, will be led by PNOC’s subsidiary, PNOC-Petrochemical Development Corp. (PPDC). PPDC earlier said the company is eyeing to allot at least $100 million (roughly P5.1 billion) to finance its 34 percent equity stake in the proposed naphtha cracker project.