Sarawak is the driving force of petrochemical industry economy cycle

KUCHING, 8 Oct: Sarawak wants the development of the state's petrochemical industry to move towards a circular economy by producing higher value products, as well as reducing its carbon footprint through more efficient use of technology and resources.

Sarawak Deputy Minister of Energy and Environmental Sustainability, Datuk Dr Hazland Abang Hipni said that the approach is essential to ensure the state's industrial development in line with the decarbonisation agenda.

Among the opportunities being explored, he said, was the development of gas-based feedstock products in Bintulu, including technology that would allow carbon dioxide to be used as a feedstock for petrochemical production.

"It's about trying to move up the value chain, including materials for clothing and methods of recycling products made from gas.

"It's a circular economy that is practically implemented, with more value, skilled work and, if implemented well, lower carbon footprint per ton", he said speaking at the Asia Refining & Petrochemicals Tech Forum (ASIA-TECH) 2026 in Bangkok.

Hazland said HighChem has a memorandum of understanding (MoU) with Sarawak Petchem for the proposed development of synthesis plant to ethylene glycol at Bintulu Petrochemical Industrial Park.

HighChem also proposes Sarawak as a pioneering location for the technology that converts carbon dioxide to paraxylene, which is a staple in the production of polyester.

According to him, the development has the potential to form a value chain from Sarawak's low-carbon gas and energy to polyester production, packaging and textiles.

Sarawak, meanwhile, is exploring an investment of about US$1 billion in Bintulu for the development of gas-based derivatives through discussions with Indorama, HighChem and Sarawak Petchem.

"We appreciate the long-term commitment to technology sharing that includes skills transfer to Sarawak people, as well as both parties' honesty on cost and timeline.

"To the operator, bring us your decarbonisation challenge. To the technology providers, bring your best proven solutions", Hazland said.

Sarawak is also exploring the development of sustainable aviation fuel (SAF), low-carbon methanol, ammonia, urea and monoethylene glycol as part of efforts to expand its more sustainable fuel and petrochemical industry.

For SAF, Sarawak Petchem together with the Government of Sarawak and private sector partners are evaluating several production methods, including Fischer-Tropsch, Methanol-to-Jet and HEFA.

Sources such as biomass and materials from palm oil plant effluent (POME) are also being studied for the purpose.

Hazland said that the progress of the initiative depends on technical feasibility, competitive production costs, market demand and strength of cooperation between industry players.

He explained that Sarawak welcomes technology providers, investors and potential buyers to collaborate in realizing more sustainable energy and petrochemical projects.