Samsung Engineering has received a letter of intent (LOI) for a US$1.07 billion contract to build a methanol plant in Bintulu in the Malaysian state of Sarawak. The facility, which is expected to be completed in late 2023, will be capable of producing 5,000 tonnes of methanol a day.

In April 2019 Samsung won the contract for the front end engineering and design (FEED) study from state-owned oil and gas company Sarawak Petchem, and the first early work contract in November 2019. The firm said on December 1 that, on the basis of its FEED work, it has now received an LOI for the engineering, procurement and construction (EPC) contract.

The Korean company, one of the world’s leading EPC and project management companies, said it sees the project as an opportunity to develop the market in Sarawak, which has large gas reserves, and create a promising position for future projects in the region.

“We were able to receive this landmark project from Sarawak Petchem, by showing our exceptional engineering capabilities and commitment made during the FEED stage”, commented Samsung Engineering president and chief executive officer Sungan Choi. “Samsung Engineering has an excellent track record for petrochemical plants and in Malaysia, which will insure optimal project execution.”

In April 2019, Euronext Paris-listed Air Liquide Engineering & Construction announced that it had entered into a partnership with Samsung Engineering for the FEED study of the planned methanol production plant. FEED is a key step that helps decision-makers get the necessary information to move on to an EPC contract.

Air Liquide will be the technology licensor, while Samsung Engineering will design the project’s utility systems and balance of plant. The facility will use Air Liquide’s proprietary process technology, Lurgi MegaMethanol, which converts natural gas into methanol.