PETRONAS Penapisan (Melaka) Sdn Bhd, a wholly-owned subsidiary of Petroliam Nasional Bhd (Petronas), has decided to defer the proposed retrofitting project of its lube base oil plant in Malacca.
In a statement yesterday, Petronas said the deferment of the final investment decision (FID) stage for the proposed retrofitting takes into account the uncertain market outlook for base oil.
It said the prices in the submitted bids have also impacted the viability of the project.
"All projects in Petronas undergo a strict stage-gating process in which the FID - where cost, market outlook and all related factors that impact the project's economics and execution are diligently considered - is a key milestone that determines whether or not projects are sanctioned," it said.
According to the statement, the Malacca lube base oil plant started its commercial operation in 2008, with a capacity of producing about 270,000 tonnes per year of mostly group III base oil, a major component for the manufacture of top-tier automotive and industrial lubricants.
The project would have increased the lube base oil plant's production capacity by about 15 per cent by 2017 upon implementation. Petronas said.