PNOC eyes Iran firm as partner for naphtha cracker project

The Philippine National Oil Co. (PNOC) and Iran Petrochemical Commercial Co. (IPCC) have signed a memorandum of understanding which may lead to a joint venture for the $600-million naphtha cracker plant and other downstream projects in the petrochemical sector.

PNOC president Thelmo Y. Cunanan, together with PNOC Petrochemical Development Corp. (PPDC) president Jose Gangan, went to Iran recently to negotiate for an oil supply deal as well as joint petrochemical ventures.

Cunanan said the two companies will designate their respective representatives who will meet immediately to carry out the terms of cooperation.

"PNOC and IPCC will enter into specific agreements later and formulate a working framework and timetable within the next six months," Cunanan said.

Under the MOU, PNOC and IPCC will immediately study the local petrochemical and plastic markets to assess their potential.

"We are optimistic that the entry of Iran Petrochemicals will help spur the interest of other investors to take part in the local petrochemical industry," the PNOC chief said.

PNOC and PPDC have been scouting for a potential joint venture partner for the two-phase naphtha cracker project which will be located in PPDC’s 530-hectare petrochemical park in Bataan.

Last month, PNOC announced the completion of a detailed feasibility study for the $1.2-billion naphtha cracker plant.

Cunanan made this announcement amid fears that the naphtha plant project would likely be shelved as prospective investors have pulled out their petrochemical investments in the Philippines.

"The Philippine cracker project is on stream. We assure that the plan to construct the country’s first naphtha cracker plant in Bataan is underway," Cunanan said.

According to Cunanan, the reports on British Petroleum Plc. and Petronas pulling out of the consortium of Bataan Polyethylene Corp. (BPC) will not affect the construction of a naphtha cracker plant.

BP and Petronas each has a 38.5-percent interest in BPC. The BPC plant has been completed as early as February 2000 but has been inoperative since August last year.

Cunanan said PNOC remains committed to invest as much as 45 percent of the project cost.