Petronas, BASF plan $1.3-bn chemical plant in Malaysia

Malaysia's state-owned oil and gas company Petronas and Germany's BASF SE, the world's largest chemical company, yesterday signed a memorandum of understanding to jointly explore the possibility of setting up a chemical facility in Malaysia to produce speciality products.

The two giants are considering an investment of approximately 4 billion Malaysian ringgit ($1.3 billion) for the joint venture (JV). Both the companies are already successful JV partners in another Malaysian venture BASF Petronas Chemicals Sdn Bhd, and the new move would further extend the companies' business collaboration.

Ludwigshafen-headquartered BASF is the world's leading chemicals company with a wide range of products in its portfolio from chemicals, plastics, agricultural products, fine chemicals to oil and gas. The company employs around 105,000 people globally and reported sales of over $66 billion in 2009.

Kuala Lumpur-based Petronas is an integrated oil and gas, and petrochemical producer. For the year ended March 2010, the company reported revenues of $62.5 billion.

Under the pact, the companies will evaluate the technical, commercial, and economic viability of jointly owning and operating world-scale facilities for the production of speciality chemicals, BASF said in a statement.

The products will include non-ionic surfactants, methanesulfonic acid, iso-nonanol as well as other C4-based speciality chemical products.