JG Summit to invest $30 million on naphtha cracker site development

MANILA, Philippines - Gokongwei led JG Summit said that they will be investing $30 million by March for the site development and engineering work of their proposed naphtha cracker plant in Batangas City.

JG Summit Holdings Inc. president and COO Lance Gokongwei said that by March 2010, the company would have invested $30 million for site development and engineering work for their naphtha cracker plant.

Gokongwei said that the project was delayed because of the financial crisis that hit most companies worldwide.

Gokongwei, however, expressed his confidence that the project will push through. “At some point it will happen.”

He said that the recovery of the Korean economy will help them fast track their project given that their contractor is a Korean firm and financing will come from Korea.

The government has already counted the P34.83 billion naphtha cracker plant investment in their 2008 investments figures. In fact in May of that year, the BOI approved the revised 2005 application of the JG Summit Olefins Corp.

The plant was supposed to begin commercial operations in January 2012. This is four years behind their original target of 2008. The plant would be located in barangay Simlong, Batangas City , near the company’s polypropylene (PP) and polyethylene (PE) manufacturing plants.

The revised project has a production capacity of 320,000 metric tons of ethylene, 190,000 metric tons of propylene, 270,000 MT of Py gas, and other by-products like methane, pyrolysis fuel oil and acid gases.

A naphtha cracker is a plant that uses a “cracking process” to produce ethylene from naphtha. It is an upstream activity of petrochemical manufacturing complex while the PE and PP are midstream operation. The major control problem associated with naphtha crackers is to regulate the conditions in the cracking process to control the ethylene output.