Bandar Seri Begawan, 20 September 2004
The Brunei Economic Development Board (BEDB) is pleased to announce the latest development
of Sungai Liang Industrial Park. This includes the selection of two proposals for further negotiations
towards the establishment of petrochemical plants in Brunei Darussalam and the appointment of a
Master Planner.
Since the publication of the BEDB’s two pronged strategy in January 2003, the BEDB has actively
marketed Brunei Darussalam as an investment destination to prospective investors overseas.
These efforts have resulted in the signing of a number of Memorandums of Understanding (MOUs)
which will lead to the achievement of the BEDB’s dual objectives of attracting USD 4.5 billion in
foreign direct investments (FDI) and creating 6000 new jobs through 2008.
Key to the BEDB’s strategy involves the development of Sungai Liang into a world class industrial
site for petrochemical and manufacturing industries that will capitalize on Brunei Darussalam’s
proven gas reserves. His Majesty’s Government has recently given its consent to the BEDB to
enter into negotiations with two consortia with the view to reach a final investment decision to
establish ammonia/urea and methanol plants in Sungai Liang. This development represents
another milestone in Brunei Darussalam’s economic diversification plan.
The consortium for ammonia/urea plant consists of Incitec Pivot Limited, Mitsubishi Corporation
and Westside Limited while Mitsubishi Gas Chemical Company and Itochu Corporation form the
consortium for the methanol plant.
During the negotiation stage, key issues such as gas supply and pricing, cost of common utilities
and infrastructure, environmental impact assessment will be discussed.
Ammonia/Urea Plant
The consortium members are Incitec Pivot Limited, Mitsubishi Corporation and Westside Limited.
An Australian public company 70% owned by Orica Limited, Incitec Pivot is that country’s largest
manufacturer and supplier of fertiliser. Mitsubishi Corporation is well known in Brunei through its
stake in Brunei LNG; however it also trades more than 4.5 million tonnes of fertiliser per annum.
Westside Limited is a privately held company, with its Indonesian subsidiary having interests,
amongst others, in ammonia and urea trade and production, focussing primarily upon the US West
Coast market. Westside has developed strong alliances with major US importers of ammonia and
urea for the past eight years.
The consortium is proposing to invest in the order of USD 600 million to set up an ammonia/urea
plant in Brunei Darussalam with the capacity of producing 2,000 tonnes of ammonia and 3,500
tonnes of urea per day. This would be the only world-scale urea manufacturing facility in Asia. The
consortium will build and operate the plant and estimates that the operation would create more
than 200 fulltime jobs. In addition, a world-scale plant such as this could be expected to create
opportunities for a further 300 positions in spin-off industries. These spin-off enterprises could
include the manufacture of urea formaldehyde, melamine, hexamine, medium density fibreboard,
ammonium bicarbonate, carbon dioxide for soft drink bottling, speciality gases such as argon for
steel fabrication and stockfeed. In addition, urea has been adopted as the standard treatment for
the abatement of nitrogen fumes from diesel exhausts.
Methanol Plant
Mitsubishi Gas Chemical Company (MGC) and the Itochu Corporation (Itochu) are international
firms with established track records of success in the petrochemical industry. MGC is one of the
largest producers and suppliers in the world, operating five joint venture methanol plants which
produce 4 million tonnes per year collectively.
At Sungai Liang, they are proposing to invest USD 288 million to set up a methanol plant with a
production capacity of 2,500 tonnes of methanol per day. The plant will create 120 to 130 jobs, with
the bulk of the technology transferred to local staff within 1½ years of operation. Such
establishment would also generate a number of possible spin-offs opportunities in a wide variety of
methanol derivatives such as the manufacturing of dimethylether, formaldehyde, acetic acid and
methylamines.
Master Planner
To ensure that the industrial park is developed in an effective and orderly manner, the BEDB plans
to appoint a ‘Master Planner’ by the end of year 2004. The Master Planner will have an
international track record of success in developing such sites and in particular will ensure that the
park is fully integrated into the local community. The Master Planner will also conduct an
Environmental Impact Assessment to ensure that the industrial park complies with Health, Safety
and Environmental policies of not only Brunei Darussalam’s guidelines but also those of
international standards.
Commenting on the Petrochemical projects, Pehin Orang Kaya Seri Dewa Major General Dato Seri
Pahlawan Awang Haji Mohammad bin Haji Daud, Chairman of the BEDB said “this is indeed an
auspicious occasion for Brunei Darussalam for it will not only provide momentum to the
development of Sungai Liang Industrial Park but more importantly a message to the global
investors that we are open for business. The BEDB will continue to work with key stakeholders
from all sectors of the economy to bring in new foreign direct investment which will create more
spin-off opportunities for our SMEs and job opportunities for our people.”
John Perry, the CEO of the BEDB commented that "these two petrochemical projects will drive the
development of Sungai Liang and in so doing address all the key issues that are equally relevant to
the other major manufacturing projects the BEDB plans to bring to the Sungai Liang Industrial
Park. It is essential that we bring the complete range of our projects to Sungai Liang not only to
achieve our diversification strategy but also to support the scope of utilities and infrastructure
required for a world class site".
Investor remarks
Westside Limited's President, Mr Angus Karoll, said the consortium partners were pleased to have
been awarded the opportunity to further evaluate the proposal.
He added that “the development of the opportunity that presents itself in Brunei for our consortium,
for the development of a world scale ammonia/urea facility, comes on the back of extensive
research within the region independently by the consortium partners to find the right geo-political
and financial parameters to warrant such a large and long term investment. Westside is confident
that Brunei can be the ideal investment location globally for such a facility for a multitude of
reasons."
Mitsubishi Gas Chemical Company and ITOCHU Corporation
MGC started to produce methanol from natural gas in Japan in 1952. In 1983, MGC established a
joint venture in Saudi Arabia, which is called AR-RAZI to operate a world scale methanol plant, the
success of which warranted further capacity expansion. MGC also established METOR, a joint
venture in Venezuela in 1994.
MGC has been enjoying a successful history internationally. Its methanol projects to date are:
Saudi Arabia AR-RAZI No.1 700,000 tonnes/year (1983)
AR-RAZI No.2 700,000 tonnes/year (1991)
AR-RAZI No.3 850,000 tonnes/year (1997)
AR-RAZI No.4 850,000 tonnes/year (1999)
Venezuela METOR 730,000 tonnes/year (1994)
MGC has developed not only its core methanol business but also a wide variety of derivatives from
methanol. It is proceeding with new methanol projects in Brunei Darussalam, Saudi Arabia and
Venezuela to meet a growth of methanol demand worldwide and plans to create a next-generation
form of energy “dimethylether (DME)” derived from methanol.
MGC and Itochu are confident that the methanol project is a most prospective development of
downstream oil & gas industries in Brunei Darussalam. By combining the natural resources in
Brunei Darussalam with MGC and Itochu’s business assets and experiences, the methanol plant
will create employment opportunities and offer great potential to generate associated support
industries. MGC will take responsibility to promptly transfer knowledge and know how so that the
proposed project company will be able to operate, maintain and manage the plant independently
as soon as possible.
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