SINGAPORE (Reuters) -Singapore’s ChemOne Group has delayed the start of its Pengerang Energy Complex (PEC) to the fourth quarter of 2028, with construction set to begin by mid-2025, it said on Monday, after securing more financing for the project.
The project has secured an agreement for $3.5 billion of financing, the company said.
“As the petrochemicals industry is set to grow exponentially, alongside rapid economic development across East Asia and Southeast Asia, the PEC project is poised to form a key driver of demand for quality aromatics in the medium to long term,” Alwyn Bowden, PEC’s chief executive, said.
The $5 billion project’s start has been delayed multiple times in the past few years after it was first announced in 2020.
“The PEC project has faced many challenges on its path to fruition, including living through the COVID restrictions and the various geopolitical impacts of both the Ukraine war and the more recent conflicts in the Middle East, all of which have conspired in creating a complex financing environment for all projects,” Bowden said.
The “complexity working with five export credit agencies as well as three Islamic entities” also resulted in a “degree of unpredictability” and timeline adjustments of the project, he added.
Earlier this year, ChemOne Group awarded the operations and maintenance contract for the PEC site to a subsidiary of GS Engineering & Construction Corp.
When completed, the site is expected to house a petrochemical facility that can produce up to 2.6 million metric tons per annum (mtpa) of products such as paraxylene, a feedstock for synthetic fibres and plastic bottles, and 3 mtpa of fuel products including jet fuel.
(Reporting by Trixie Yap. Editing by Sonia Cheema and Mark Potter)
