6 May 2007 - 09:52
  • News Code: 103905

Bandar Seri Begawan - The Brunei Methanol Company Sdn Bhd (BMC) reached another milestone yesterday with the signing of financing agreements necessary to fund the construction of the first methanol plant in the Sultanate.

The construction of the world-class methanol plant, which has a production capacity of 850, 000 metric tonnes/year, will cost approximately USD$ 400 million. The entire project involves a total investment of more than half a billion US dollars.

 

As the project involves a significant amount of investment, BMC, through its financing advisor, Bank of Tokyo Mitsubishi UFJ, Ltd (BTMU) has successfully negotiated for the project to be financed on a limited recourse ‘Project Finance" basis.

 

This international project financing is the first of its kind for Brunei Darussalam. Yesterday"s signing ceremony was held at Rizqun International Hotel in Gadong.

 

Present as the co-guests of honour at the signing ceremony were Brunei"s Minister of Energy, Pehin Orang Kaya Seri Utama Dato Seri Setia Awang Haji Yahya and Japan"s Minister of Economy, Trade and Industry, Mr Akira Amari.

 

The ceremony saw the signing of the common terms agreement between Mr Kinya Tsuji, CEO of BMC, Mr Koji Tanami, Deputy Governor and Managing Director of Japan Bank of International Cooperation (JBIC) and Mr Tetsuo Iwata, Managing Executive Officer of BTMU. Representatives for the shareholders from BMC - Mr Akira Ohira, Chairman of Mitsubishi Gas Chemicals Company Inc (MGC); Haji Mohd Ja"afar Hj Awang Bakar, CEO of Brunei National Petroleum Company (PetroleumBRUNEI); Haji Iskandar HajiYahya, Chairman of PB Petrochemical (PetroleumBRUNEI"s subsidiary); and Mr Uichiro Niwa, Chairman of ITOCHU Corporation (ITC) - were also signatories of the agreement.

 

Formal negotiations between the representatives of the project shareholders, comprising MGC, PetroleumBRUNEI, ITC and JBIC started in 2005, following the signing of the shareholders" joint venture agreement.

 

The development of the project is to be financed via approximately 65 per cent of project financing facility led by JBIC who provides 70 per cent of the total project loan amount, whilst the remaining 30 per cent is provided by a syndication of commercial banks comprising BTMU, Mizuho Corporate Bank, Sumitomo Mitsui Banking Corporation (SMBC) and Standard Chartered Bank.

 

During the signing ceremony, Japan"s Minister of Economy, Trade and Industry highlighted the long working ties between Brunei Darussalam and Japan noting that Brunei Darussalam has been a major supplier of oil and gas to Japan, arid has been supplying LNG to Japan longer than any other country.

 

"Japan is pleased that both its government and private sectors are able to play a role in the establishment of a new industry in Brunei Darussalam, in the form of technology from Japanese private enterprise and financing from JBIC and private sources," he added.

 

Meanwhile, the CEO of PetroleumBRUNEI in his speech underscored the importance of the cooperation offered by JBIC to share its knowledge and skills in project financing. "Such cooperation is important in the development of our people to meet our ambitious plans. The plan includes expanding our business in the upstream, midstream and downstream areas of the petroleum industry both in the domestic and international arena," he added.

 

"This is just the first step of many exciting things to come. We will also explore other opportunities arising from this project such as derivatives and shipping," he continued. Mr Koji Tanami, Deputy Governor and Managing Director of JBIC, said the project is also important from the Japanese perspective, since it contributes to the stable supply of methanol resource to Japan.

 

"With the Brunei Methanol project taking the very first step forward, JBIC is ready to provide support for the successful construction and operation of the project, jointly with the Brunei government and the sponsors, by utilising a variety of manners," said IvIr Tanami.

 

Mr Niwa, Chairman of ITOCHU Corporation, stressed the importance of efforts, cooperation and understanding between the Japanese counterpart and Brunei Darussalam as a host country, as a key factor to making the collaboration a huge success. Just recently, BMC has signed several project operational agreements required for the physical construction and operation of the plant.

 

Yesterday"s signing of the project financing documents signifies the successful achievement of the final component, that is, the necessary funding for BMC to commence with construction works towards realising Brunei Darussalam"s first worldclass methanol plant, and bringing it fully into commercial operation by 2010.-- Courtesy of Borneo Bulletin

 

PIN/BRUDIRECT.COM

News Code 103905

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