The $5 billion Pengerang Energy Complex (PEC) in Malaysia, which is being developed by Singapore-headquartered developer of energy and petrochemicals projects ChemOne, has received $500 million in financing from Middle East banks and financial institutions.

PEC’s $3.5 billion senior debt component includes Export Credit Agency (ECA) financing and an Islamic Finance Tranche. 

Jeddah-headquartered Islamic Development Bank (IsDB) and its two subsidiaries - Islamic Corporation for the Development of the Private Sector (ICD) and Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) are participating in the Islamic Finance tranche, which is being led by Saudi’s Al Rajhi Bank as the lead Islamic Bank and ICIEC coordinator. 

Jawad Khokhar, Head of Infrastructure, Energy and Mining Financing at ICD said: “ICD is proud to support the development of this state-of-the-art aromatics complex in Malaysia that aligns with its goals of promoting economic growth and sustainable development in its member countries. The project is expected to be a major export contributor for Malaysia and has strong financial backing from leading global financial institutions. ICD is committed to supporting such impactful and sustainable projects across its member countries.”

PEC is also in talks with other investors and lenders from across the Middle East to invest in the project, which will utilise natural gas condensate or Deodorised Field Condensate (DFC), from the region.

The 6.5 million metric tonnes per annum (mmtpa) facility, which will deploy Honeywell UOP’s LD Parex technology, will process150,000 barrels per day (bpd) of condensate plus side feed of naphtha to produce 2.3 mmtpa of aromatics, 3.9 mmtpa of energy products and 50,000 metric tonnes per annum (mtpa) of hydrogen.

Italy’s Maire Tecnimont is the engineering, procurement, construction and commissioning (EPCC) contractor while Zeit Operation & Maintenance Co (Zeit), a wholly owned subsidiary of South Korean conglomerate GS Engineering & Construction, is the operations and maintenance (O&M) contractor.

In March 2023, PEC announced that it secured $102 billion worth of long-term feedstock supply and product off-take agreements with energy majors Chevron and Equinor, Thai national oil company PTT, and Japanese trading house Mitsui & Co, which is sufficient to support initial 12 years of operation.

PEC has been designed in line with International Financial Corporation's (IFC) performance standards and Equator Principles 4 with environmental consultant, Ramboll, having conducted due diligence review of the project. When completed, the PEC is set to be one of the largest low-carbon aromatics production facilities in the world.

(Editing by Anoop Menon) (anoop.menon@lseg.com)

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