KUALA LUMPUR (April 28): Petronas Chemicals Group Bhd's (PetChem)'s Sabah Ammonia Urea (SAMUR) project, which is slated to begin commissioning of commercial operations in the second half of this year, will start contributing to the company's bottom line this year.

PetChem chairman Md Arif Mahmood said today the plant will begin commissioning at 50% of its quarterly production of 300,000 metric tonnes, with a production of 150,000 metric tonnes of ammonia in the fourth quarter of this year.

He said the plant has an annual capacity of 1.2 metric million tonnes.

"The plant will run at 70% to 75% capacity next year," he said at a press conference after the annual general meeting today.

"The plant will start contributing to our bottom line at the end of this year," he added.

However, Arif said the contribution will be minimal to PetChem's bottom line as the production volume is minimal and prices are soft.

He said 98% of the SAMUR plant is completed.

Once completed, the plant will add 1.2 million metric tonnes per annum of urea production to its existing 1.4 million metric tonnes per annum, making PetChem the second largest urea producer in Southeast Asia.

Arif also said PetChem's integrated aroma ingredients complex project in Gebeng, Pahang, is expected to come on-stream in October 2016, but will only begin contributing to the company's bottom line next year.

As for capital expenditure, Arif said the company is allocating US$1 billion (about RM3.89 billion), the bulk of which will be channelled towards the Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang.

PetChem had acquired the entire equity of three companies — PRPC Polymers Sdn Bhd, PRPC Glycols Sdn Bhd and PRPC Elastomers Sdn Bhd — for RM13,000 in November last year. PetChem will also assume US$110 million in liabilities of the three companies.

The three companies are currently undertaking petrochemical projects with a future investment cost of US$3.9 billion in RAPID, with a combined total capacity of 2.7 million tonnes.

PetChem, which is 64.35%-owned by Petroliam Nasional Bhd (Petronas), expects operations of the petrochemical projects in RAPID to begin in 2019.