ChemOne’s Pengerang Energy Complex appoints China’s CNCEC as its new EPCC contractor
Pengerang Energy Complex Sdn Bhd (PECSB) has appointed China National Chemical Engineering Co Ltd (CNCEC) as the main contractor for its downstream petrochemical facility in Johor. According to a statement from PECSB, CNCEC will serve as the engineering, procurement, construction and commissioning (EPCC) contractor to advance the project toward construction and final financing approvals.
Why was CNCEC selected for the Pengerang project?
PECSB stated that CNCEC was chosen following a “rigorous evaluation process” that assessed project execution capabilities, financial strength, and technical expertise. The company specifically noted CNCEC’s familiarity with Honeywell UOP technologies, which are central to the facility’s process design.
The appointment is described by PECSB as a significant milestone. It allows the project to move through the final approval stages with project finance lenders and global export credit agencies.
How does this change affect project financing?
The shift in contractors follows reported challenges with the project’s initial EPC partner. The Edge reported in November 2025 that the PEC—part of the Singapore-based ChemOne Group—faced difficulties after Italy-based Maire SpA revised the engineering, procurement and construction costs upward from an initial US$2.5 billion (RM10.16 billion).
Under the previous arrangement with Maire SpA, the Italian Export Credit Agency was to provide up to US$1.16 billion. Because of the new appointment, PECSB has likely restructured the project’s finance. Committed financing has previously included development banks in the Middle East and export credit agencies from Asia and the US.
What will the Pengerang Energy Complex produce?
The PEC is designed as an integrated aromatics facility and condensate splitter. According to earlier announcements, the plant is envisioned to produce 3.9 million tonnes of petroleum, 2.5 million tonnes of aromatics, and 50,000 tonnes of hydrogen annually.
Reports indicate that Chevron Corp and Norwegian energy firm Equinor ASA serve as both product offtakers and feedstock suppliers. Other identified offtakers include Mitsui & Co from Japan and Thailand’s PTT.
For its logistics and storage needs, the project will utilize the Pengerang Deepwater Terminals operated by Dialog Group Bhd (KL:DIALOG) for onshore tank storage and marine facilities.
What happens next for the facility?
The appointment of CNCEC is likely to signal a move toward active construction. PECSB may now finalize its restructured financial agreements with the remaining export credit agencies and lenders.
A possible next step involves the formalization of the revised budget to avoid the cost revisions seen under the previous partnership. The project’s timeline could depend on the speed of these final approvals from global lenders.
Frequently Asked Questions
Who is the main contractor for the Pengerang Energy Complex?
China National Chemical Engineering Co Ltd (CNCEC) has been appointed as the main EPCC contractor.
What are the projected annual production capacities of the PEC?
The facility is envisioned to produce 2.5 million tonnes of aromatics, 3.9 million tonnes of petroleum, and 50,000 tonnes of hydrogen per year.
Which companies are involved as offtakers for the project?
Identified offtakers include Chevron Corp, Equinor ASA, PTT, and Mitsui & Co.
How do you think the shift in contractors will impact the project’s completion timeline?