German chemicals firm BASF and Malaysia-based petrochemical firm Petronas have mutually terminated the Heads of Agreement (HoA) between the two parties for a joint speciality chemicals venture within Petronas’s Refinery & Petrochemical Integrated Development (RAPID) project in Pengerang, Johor.

Under the terms of the HOA, the partners had agreed to form a new entity , BASF (60%) and Petronas (40%), to jointly own, develop, construct and operate production facilities for isononanol, highly reactive polyisobutylene, non-ionic surfactants, methanesulfonic acid.

Following negotiations, Petronas and BASF concluded that it would be in their mutual interest to terminate the HoA as both parties were unable to come to an agreement on the terms and conditions. According to analysts, the cancellation of the BASF-Petronas portion of the Pengerang project may set back, but not jeopardise, the overall project.

However, both parties said that they will continue to operate the BASF Petronas joint venture in Gebeng, Kuantan, Pahang.