Newsletter No. 609
News-Analysis
May 8, 2007

 

A JAPAN-BRUNEI PARTNERSHIP ON METHANOL

As the final stop on his international tour METI Minister Akira Amari visited Brunei. At the same time, an important partnership on the production of methanol was announced. (Methanol is a raw material for synthetic resin and paint).

The agreement was made between the Brunei Methanol Company (BMC), the Japan Bank of International Cooperation (JBIC), and other Japanese banks to fund the construction of the first methanol plant in the Sultanate, which is expected to be completed by 2010. According to the Borneo Bulletin: “The construction of the world-class methanol plant, which will have a production capacity of 850,000 metric tons per year, will cost approximately US$400 million. The entire project involves a total investment of more than half a billion US dollars.”

The ownership of the completed plant is expected to be distributed as follows:

50% -- Mitsubishi Gas Chemical Company
25% -- Brunei National Petroleum Company
25% -- Itochu Corporation

Stated Brunei’s Minister of Energy, Pehin Orang Kaya Seri Utama Dato Seri Setia Awang Haji Yahya: “Consuming countries want a secure and stable supply of oil and gas for their economic activities.” But he also noted: “We would like consuming countries like Japan to invest and look into the non-oil sectors in Brunei Darussalam as well, in order to strengthen and deepen the economic foundation of the country.”

This was the first time that the government-owned JBIC took part in a major financing project in Brunei, and the minister addressed this point too: “It is hoped that with the involvement of JBIC in Brunei Darussalam, the financing options will help to widen businesses in Brunei Darussalam.” JBIC is expected to provide loans for about 70% of the total methanol project’s cost.