KUALA LUMPUR (April 25): Petronas Chemicals Group Bhd (PetChem) has entered into an agreement to sell a 25% stake in Petronas Chemicals Fertiliser Sabah Sdn Bhd (PCFS) to SMJ Sdn Bhd for RM1.2 billion.

SMJ is wholly-owned by the Sabah government and oversees the state’s overall interest in oil and gas (O&G) developments in Sabah.

The agreeement comes three months after PetChem inked a heads of agreement with SMJ for the 25% divestment in PCFS, as part of its strategic effort to position itself as a preferred partner in shaping and implementing efforts to sustain and grow its petrochemicals business in Sabah.

Upon completion of the stake sale, PetChem will be left with a 75% stake in PCFS.

“This opportunity will further strengthen our working relationship between PetChem and the state of Sabah and unlock potential for similar collaborations in the future," PetChem managing director and CEO Mohd Yusri Mohamed Yusof said in a joint statement.

“We are also confident that this collaboration will further spur the development within the Sipitang Oil and Gas Industrial Park (SOGIP), creating more economic benefits to the bigger surrounding communities in Sabah,” he added.

PCFS was established in 2011 to construct, own and operate an integrated ammonia and urea production complex in SOGIP, which is designed to produce 1.9 million  tonnes of ammonia and urea per annum, the statement said.  

It is the largest single train ammonia and urea plant in Southeast Asia and third largest urea plant in Asia Pacific.

The statement said PCFS is a key catalyst for the development of the O&G industry in Sabah through SOGIP.  

Shares in PetChem closed unchanged at RM7.20 on Tuesday (April 25), giving the group a market capitalisation of RM57.6 billion.

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Petronas Chemicals to divest 25% stake in Petronas Chemicals Fertiliser Sabah to state unit