The private sector and the government have agreed in principle that the country can host only one naphtha cracker plant.
Industry sources said that a consortium might be in the offing as all the interested parties have been meeting with the Department of Energy (DOE) in the past few months. "In fact, they have already formed working committees to seriously look into running the plant as a consortium," they said.
The interested parties from the private sector are Petron Corp., JG Summit, the Chinese Petroleum Corp. (Taiwan), Itochu (Corp. (Japan), the Petroleum Corp. of Asia and Pacific (Petrocorp), and Sumitomo Corp.
Petrocorp is a consortium composed of Japanese trading giants Mitsubishi and Sumitomo, Kellogg Brown & Roots of the US, and British Petroleum. It has already started the construction of a polyethylene plant at the state controlled petrochemical park in Bataan.
Representing the Philippine government are the Philippine National Oil Co. Petrochemical Development Corp. (PPDC), the Department of Trade and Industry Board of Investments (DTI-BOI), and the DOE.
Working committees have been formed to study government incentives, engineering, construction, design, and financing.
They have agreed that only one plant is feasible and economical. But a second one should be established within five to eight years as the economy picks up and international market demand increases. Estimated initial cost of a plant was placed at $500 million.
Energy Secretary Mario V. Tiaoqui confirmed this last Wednesday saying that they are hoping to finalize plans within the year, and make operational the plant by 2002.
"We are really pushing for it. We must with the interested groups in late January this year to accelerate the timetable (for the establishment of the plant)," Tiaoqui stressed.
He likewise confirmed that Petron has been interested in the project as a supplier of coke and other petroleum byproducts. The company is offering its facilities (refinery in Bataan) in order to minimize the investment requirements of the prospective consortium.
The energy secretary said the operational capacity will be raised from 450 metric-tons to 700. That level has been determined as the capacities necessary to fulfill the country's requirements as well as meet international competition.
A naphtha cracker plant supplies the basic raw materials for the downstream petrochemical sector such as monomers and polymers.