KUALA LUMPUR (Dec 14): Petronas Chemicals Group Bhd said its marketing unit has inked a deal to market methanol produced by a Sarawak state-owned company.

Petronas Chemicals Marketing (Labuan) Ltd will act as the marketing arm for Sarawak Petchem Sdn Bhd for methanol from the latter's plant in Bintulu for 20 years, with the option for further extension.

Petronas Chemicals said Sarawak Petchem made the decision based on the former's status as the largest methanol producer in the Asia-Pacific region and the fourth largest globally, with an annual production capacity of 2.4 million tonnes per annum.

The plant is expected to come on stream in 2022 and will receive 140 million standard cubic feet per day of natural gas feedstock from Petroliam Nasional Bhd (Petronas), Petronas Chemicals said in a statement issued jointly with Sarawak Petchem.

Sarawak Petchem is the first Sarawak government-owned company that produces methanol, with an annual capacity of 1.7 million tonnes per annum.

Petronas Chemicals chairman and Petronas' Downstream Business executive vice president Datuk Md Arif Mahmood said the group would be able to boost the supply of methanol to its customers through the partnership with Sarawak Petchem.

"It will enable us to fulfil the rising demand from the Asia Pacific, especially in Southeast Asia, China, South Korea, Taiwan, Japan, and India, where the growing middle class is contributing to a higher consumption of petrochemical products," he said.

Sarawak Petchem chairman Tan Sri Dr Amar Abdul Aziz Husain said the deal marked a milestone for Sarawak's realisation and involvement on the petrochemical-downstream oil and gas industry, especially for Bintulu.

Petronas Chemicals' share price closed lower by 5 sen or 0.55% to RM9.12 today, with 12.63 million shares traded. Its market capitalisation stands at RM73.36 billion.