Petronas Chemicals Rises To Nearly Two-year High As Pengerang Refinery Restarts

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Petronas Chemicals Group Bhd’s share price increased about 4% to its highest level in over two years on Monday (Sept 27), boosted by news of the company’s anticipated reopening of its refinery-petrochemical complex in Pengerang, Johor, by end-2021 following a fire in March 2020.

At 5 p.m. on Monday, Bursa Malaysia’s stock price had reduced gains to RM8.26, but was still up 15 sen or 1.85 percent with approximately 16.04 million shares traded.

The counter gained as much as 31 sen or 3.82 percent to RM8.42 earlier in the session, as investors factored in the favourable impact of rising crude oil prices on the average selling prices of Petronas Chemicals’ goods.

On Monday, Petronas Chemicals’ share price reached an intra-day high of RM8.42, the highest level since July 12, 2019, when the shares ended at RM8.42.

Datuk Md Arif Mahmood, executive vice president and downstream chief of Petronas, told Reuters that the national oil company hopes to restore operations at the Pengerang refinery-petrochemical complex by year’s end.

The Pengerang refinery, which has a daily capacity of 300,000 barrels, is part of the US$27 billion Pengerang Integrated Complex, which is a 50:50 joint venture between Petronas Chemicals and Saudi Aramco.

The factory was shut down in April 2019 following an explosion, and a subsequent fire in March 2020 further delayed commissioning. Later that year, the restart was pushed out from March 2021 to the second part of this year.

Arif also stated at the Platts APPEC 2021 conference that Petronas “remains cautious” when it comes to refining and petroleum products, citing the continued impact of travel restrictions on aviation fuel demand recovery while refining capacity remains oversupplied.

Petronas’s other refineries are functioning at about 70% to 75% of their capacity, Arif noted. According to Petronas Chemicals’ annual report, the Pengerang facility will increase the company’s capacity by 10%.

Petronas Chemicals had a market capitalisation of RM66.08 billion at the time of its last close.

Published by Zack Baharum

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