Downstream Potential

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Though still some months from coming on line, Brunei's first methanol production facility is starting to fulfil some of the ambitions set for it by the government, prompting new side industries and investment.

One of the first spin offs from the Brunei Methanol Company (BMC) plant, which is being built at the Sungai Liang Industrial Park (SPARK) in the Belait district, has recently been announced.

The Brunei National Petroleum Company (BNPC) signed an agreement on April 10 with Japanese firms Kokuka Sangyo and the Itochu Corporation to set up a joint company that will transport the output from the BMC plant. The two Japanese companies will have a 30% and 20% stake respectively in the new company, while BNPC's subsidiary PB Logistics will hold the remaining 50% of shares.

The joint venture will use a 5500-tonne chemical tanker to transport methanol to international markets, mainly in Asia.

Speaking at the signing ceremony, Hj Mohd Ja'afar Hj Awg Bakar, the CEO of BNPC, said, "This project marks a significant milestone as it diversifies the scope of Brunei's shipping industry from only liquid natural gas to include methanol shipping. This means local job opportunities for crew manning of the vessel."

Brunei's finance and insurance sectors would also benefit from the project, with coverage to be provided by local institutions to help liquidity and ensure revenue for the country was maximised, said Mohd Ja'afar.

"Opportunities within the Brunei methanol tanker project will provide these local institutions with additional business scope," he said. "There will also be opportunities to gain experience in financing and insuring technical projects of this nature."

Brunei's maritime sector will also benefit from the transfer of skills and technology that will come through the project. Management of the ship will be handed over to a local company within seven years, Mohd Ja'afar said.

BMC, a joint venture between Brunei's state-owned PB Petrochemical Company and Japan's Mitsubishi Gas Chemical Company and Itochu, is due to start production at its new plant in summer this year. When at full production, the facility will be able to turn out 850,000 tonnes of methanol annually, using methane provided from Brunei's extensive natural gas fields. Most of the output is destined for export.

The government hopes that by developing a new export industry, the plant will also provide the impetus to kick start other domestic side industries that rely on methanol as their base material, in addition to support services to BMC such as technical maintenance and information and communications technology.

The Brunei Economic Development Board (BEDB) has conducted a series of workshops and seminars on uses of methanol and business opportunities for the local community. The focus of the BEDB's information campaign has been on the potential for developing downstream industries such as paint production, plastics, processed wood and the chemicals sector.

A proposal has also been discussed for some of Brunei's cars to be converted to use methanol as fuel, offering a cheaper and less environmentally damaging alternative to petrol or diesel.

According to Dato Timothy Ong, BEDB's acting chairman, a recent trip to Japan highlighted its interest in Brunei's petrochemicals sector and had also demonstrated the wide range of uses for gas derivatives such as methanol.

"When I went to Japan, I saw what they have done with other people's resources... It was a very educational trip for us because it demonstrated how much can be created from gas," he said in an interview with the local press in mid-March.

With BMC's plant due to come on line in just a few months, Brunei will be looking to further encourage foreign interest in its emerging methanol industry.

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