Petrocorp wants naphtha cracker plant built this year

Petrochemical Corp. of Asia-Pacific (Petrocorp) is pushing for the construction of the country’s first naphtha cracker facility this year, a company official said yesterday.

"I hope the new government will consider pursuing the (naphtha cracker) project. We really need this," Petrocorp president Antonio Garcia said.

Garcia said the government should at least move forward and work out the contract for the construction of such plant within the year.

The proposed naphtha facility would produce 600,000 to 700,000 metric tons (MT) of naphtha, which would serve as feedstock for other petrochemical plants.

Garcia said they are willing to invest up to five percent of the total project cost. He said their investment will be in the form of infrastructure since the company "has no cash."

"We will participate but we will not give more than five percent. This equity may come in kind or the use of our infrastructure. We do not have resources to invest. We have no cash," he said.

Last December, the Philippine National Oil Co. (PNOC), the government-controlled corporation tasked to take the lead in the construction of the naphtha cracker project, was in the process of selecting the technical and financial advisers for the $600-million undertaking.

PNOC, through its petrochemical arm Petrochemical Development Corp. (PNOC-PPDC) is considering a stake of 34 percent in the project to be constructed in Marveles, Bataan. PPDC is planning to finance its equity via proceeds that would come from a planned bond offering.

However, PNOC-PPDC is willing to reduce its participating interest to accommodate the private companies.

Among the prospective investors of the naphtha cracker plant are Chinese Petroleum Corp., Petron Corp., Itochu Corp. of Japan, JG Summit, and Petrochem. These companies have already signed a memorandum of understanding with PPDC for a possible participation in the project.

If equity structure will be finalized within this year, the construction of the project is scheduled to start by 2003. It will be operational by the first quarter of 2004.