EXECUTIVE SUMMARY

OPTIMISTIC ORGANIC Sdn. Bhd. (OOSB) is currently operating a 30 000 tn/yr Maleic Anhydride (MA) production facility in the Industrial Estate (TKIE) in Kemaman, . The following EIA and QRA reports related to OOSB MA complex have been done and submitted to DOE:

I. Environmental Impact Assessment (EIA) for the Proposed TLC Industries (M) Sdn. Bhd. Maleic Anhydride Plant in Kemaman, Terengganu, Malaysia,1995.

II. Preliminary Risk Assessment for the Proposed TLC Industries (M) Sdn. Bhd. Maleic Anhydride Plant in Kemaman, Terengganu, Malaysia,1995.

III. Supplementary EIA Report for Incinerator for the Proposed TLC Industries (M) Sdn. Bhd. Maleic Anhydride Plant in Kemaman, Terengganu, Malaysia,1995.

Over the years of operation, demand for these products is more than it was originally foreseen. In order to meet this demand, OOSB are planning to upgrade the plant capacity of existing plant at additional 33% to 40 000 tn/yr. This will involve installation of additional equipment and revamping of existing equipment. .All new equipment will be constructed within the current plant boundary.

PROJECT TITLE

The title of this report is Environmental Impact Assessment (EIA) for the Proposed Maleic Anhydride Plant Expansion in KawasanPerindustrianTeluk Kalong, Kemaman, Terengganu.

STATEMENT OF NEED

The proposed facility expansion is toincrease the production of Maleic Anhydride (MA) to meet the increasing worldwide demand for this important petrochemical product which is used in coatings, adhesives, resins, paints, plasticisers, insecticides and food chemical worldwide.

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PROJECT INITIATOR AND CONSULTANTS

The project initiator for the proposed project is Optimistic Organic Sdn. Bhd. with its corresponding address is as follows:

Optimistic Organic Sdn. Bhd. Lot 3351, Teluk Kalong Industrial Estate 24007 Kemaman, Terengganu Tel: 09-863 3029 Fax: 09-863 3085 Contact Person:Mr Parekh NareshkumarKhimchand (President) : Tn. Hj. Ali b. Hj. Ayub (Manager) : S. Rajmohan (Head QA & System Administration)

The Project Initiator has appointed HSE Management Sdn. Bhd. to conduct the Environmental Impact Assessment (EIA) for the proposed project. The correspondence address of HSE Management Sdn. Bhd. is as follows:

HSE Management Sdn. Bhd. 1-5, E2, PJU1/42A, Dataran Prima Petaling Jaya, 47301 Petaling Jaya Tel: 03-7880 2981 Fax: 03-7880 7981 Contact Person: Mrs. Santa Naidu (Manager)

PROJECT LOCATION

The proposed project located in Teluk Kalong Industrial Estate (TKIE), Kemaman, Terengganu. The proposed plant expansion shall be established on the existing facility on a 12.5 ha parcel land located at the north end of industrial estate. The TKIE is located less than 1 km from Kemaman Port, which has adequate facilities to handle the raw materials if required. The TKIE is approximately 8 km north of the Town. Kuantan is located 68 km while is located 140 km to north. The location for the proposed project location is shown in Figure ES-1.

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Proposed Project Location, Teluk Kalong Industrial Estate

Figure ES-1: Location of the Proposed Plant

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PROCESS DESCRIPTION

The operation of the existing plant is to produce pure Maleic Anhydride with the capacity of 30 000 Tonne per annum (TPA). The MA facility is built to operate using n-butane as feed stock. Figure ES-4andFigure ES-5show the n-butane plant and the existing and future mass balancefor the Proposed Maleic Anhydride Plant Expansion. The process involves the gas phase oxidation of raw butane in the presence of air with a fixed bed catalyst to form crude MA (CMA). Five per cent of CMA is condensed and separated The remaining CMA remains in gas phase with the other reaction gas products and inert gases. This CMA is recovered by washing the vapour with water to form maleic acid solution. This solution is dehydrated using orthoxylene to form CMA and fumaric acid. The CMA produced from the dehydration is recombined with the condensed CMA and purified using distillation process. The fumaric acid is separated as a by-product after the dehydration process.

The main raw materials for the plant are mixed butane. At past the plant was operated with benzene as a feed stock and now the raw material changed from benzene to n-butane. For this process the raw butane (mixed butane) is sourced from PETRONAS. Mixed butane supplied through pipeline passing by the side of the plant. The raw butane separation and subsequent conversion technology has been supplied by UOP.

Table ES-1: List of Raw Materials and Finished Products

A. RAW MATERIALS QUANTITY Before Expansion After Expansion Mixed Butane 40000 Ton / Year 50000 Ton / Year B. PRODUCT Maleic Anhydride 30000 Ton / Year 40000 Ton / Year C. BY-PRODUCT Fumaric Acid 550 Ton / Year 730 Ton / Year

Incinerator

All the waste gas, liquid and solid residual from the production processesare fed to an existing incinerator where the gases are incinerated in a natural gas flame.Figure ES-2 shows the mass balance of incineration process before and after the proposed expansion.

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The combustion products from the burner are injected with steam to minimise smoke generation. The hot gases then pass through a series of 8 heat exchangers before they are vented to the atmosphere through a stack. The heat removed from the vented gases is used to preheat air used in the incinerator and generate steam.

There will be no expansion in the existing thermal Incinerator, as the existing design is sufficient to cater for an additional feed rate.The plant will be taken shut-down automatically when the incinerator fails (as per Process Control System and Procedure) as to run Oxidation (Reactors) Plant, it is mandatory to have the thermal Incinerator running.

BEFORE EXPANSION (EXISTING):

WATER STEAM IN (8 TPH) OUT (8 TPH)

(a) FEED GAS (126500Kg/h) FLUE GAS (b) SUPPORT FUEL GAS(150 Kg/h) (NATURAL GAS) 126776 Kg/h (c) RESIDUE (126 Kg/h) (LIQUID)

AFTER EXPANSION:

WATER STEAM IN (25 TPH) OUT (25 TPH)

(a) FEED GAS (190000 Kg/h) FLUE GAS (b) SUPPORT FUEL GAS(450 Kg/h) (NATURAL GAS) 190620 Kg/h (c) RESIDUE (170 Kg/h) (LIQUID)

Figure ES-2Feed to the Incineration Process before and After The Proposed Expansion.

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Effluent Treatment

The Effluent Treatment Plant Systems is shown in Figure ES-6.There will be additional wastewater volume that will be sent to the treatment plant. The new loading however is still much below than the design capacity of the existing treatment plant. Figure ES-3shows the water balance and volume that will be sent to the treatment plant before and after expansion.

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Water Balance All figures are M3/Month Present figures are estimated for 30000 MT production/month Evaporation & drift loss Future figures are estimated for 40000 MT production/month 23045 30727 Estimated rain water as all drying beds and plant are open to atmosphere 25606 2561 90 Cooling tower 34141 3414 Raw water 31384 4158 416 3504 3894 DM plant ETP 41845 5544 554 4673 5163

1320 Domestic and 528 300 general use 1760 704 Mainly wash 400 water in Chemicals preparation at Mainly toilet operation area ETP water

Septic tank 792 1056

Figure ES-3 Overall Water Balance Before and After Expansion (numbers in brackets are values after expansion)

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Dryers Iso-Butane

PCE Hydrogen

MA Plant n-Butane Heavier Gas Butamer Storage Bullet to Reactor Boiler

Mix-Butane Stabilizer Regent Vaporizer Lights Gas to Boiler

ETP Scrubber Superheater

Caustic Lye

Condenser All Dryers

Figure ES-4: n-Butane Plant Diagram

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MA plant capacity increse from 30000tpy to 40000tpy

Mixed Existing Future Eu Butane 37600 50000 TPY OFF Existing Future Eu BUTANE PLANT TO BOILER GAS 3088 4107 TPY (yield at 92%) Existing Future EU H2 80 107 TPY N-Buatne

MA plant S.No Description Units EXISTING FUTURE Existing Future Eu MA Finished product Existing Future Eu 1 Capacities TPY 30000 40000 30000 40000 TPY N Butane MA reactors Operating 34592 46000 TPY 2 % 1.7 1.5 FAC 550 730 TPY By product Mole ratio 3 MA reactor yield % 90 90 Reactor to distillation Existing Future Eu 4 % 96.5 96.5 Existing Future Eu Air yield Raw gas 1000000 1515450 TPY 5 Running hrs 8000 8000 1003502 1520000 tpy TO INCINERATOR Process 6 Plant Reliability % 95 98 540 720 TPY residue

Figure ES-5: Overall Mass Balance for the Proposed Maleic Anhydride Plant Expansion

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EXISTING ENVIRONMENT

CLIMATE

The climate of the Proposed Project site can generally be characterized as humid warm weather conditions throughout the year, with uniform temperatures, high humidity and rainfall. Humidity and temperature show very little variations over the year and it is difficult to divide the year into distinct wet and dry seasons.

AIR QUALITY

Ambient Air Monitoring

The air quality data recorded between January 2013 to November 2013 at five sampling stations around the proposed area& two nearest sensitive areas shows that the concentration of major air pollutants (TSP,NO2, and SO2) recorded are far below the value suggested by Recommended Malaysia Air Quality Guideline.

Stack Monitoring

The concentration of existing air pollutants are based on the concentration of air pollutants recorded at two stacks within the project site in the year of 2013. The concentrations of existing air pollutants are based on the concentration of air pollutants recorded at a boiler and thermal incinerator stack in the Optimistic Organic Sdn Bhd. The parameters determined to be dust particulate concentration at

12% CO2, dioxins & furans, sulphur dioxide, nitrogen oxides and flue gas velocity from a thermal incinerator stack, while the concentration of H2SO4, SO2, NOx and dust particulate from a boiler stack. The result shows that all parameter recorded are lower than DOE limits.

WASTEWATER

Discharges and runoffs from the proposed project drain into a river, Sg. Chukai. Based on the temporal monitoring data for treated effluent quality, the treated effluent meet the Standard B of the EQ(IE)R 2009.

NOISE

A total of 5 monitoring stations were selected to obtain the existing noise levels at surrounding of the factory boundary.In general, all the existing day-time and night- time baseline noise levels measured at the selected noise sampling stations are lower

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than the permissible sound level, i.e. 70 dBA and 60 dBA, respectively, for commercial and business area.

SOCIOECONOMY

Socioeconomic survey carried out at the premises mentioned indicates the people are generally having no objection with the current operations and the proposed project and there are no major issues with the proposed project. However, About 46.3% of the respondents agreed with this proposed project and another 53.7% is either not agreed or no response.

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Title: Effluent Treatment Plant Diagram

South Pool Effluent

Raw Effluent Collection Filtrate Water Overflow Recycle Line Line

Equalization Tank

Filtrate Flocculation Tank Sump

Primary Clarifier Lights Gas + Hydroge n Sludge Drying Anaerobic Filter Beds Trickling SAFF Reactor Filter Filter

PPS Tank

Chlorine Contact Tank P A S C X Treated Effluent F F Tank Treated Effluent Discharge Point

Figure ES-6: The Effluent Treatment Plant Systems

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ASSESSMENT OF POTENTIAL IMPACT AND MITIGATING MEASURES

AIR QUALITY

Based on the dispersion modelling, the impact of emissions from the incinerator stack after plant expansion during normal operation is very small. The maximum ground level concentrations contributed by these emissions after expansion are dust: 3 3 3 2.4 µg/Nm , SO2 1 hr: 2.3 µg/Nm , NO2 :12.3 µg/Nm and dioxin: 4.5 ng i-TEQ /Nm3. This is due to the emissions of pollutants from the stacks are very small in quantity.

The incinerator does not have any additional air pollution control equipment, hence there is no worst case scenario due to failure of such equipment. The plant is set-up such that when the incinerator is not working the reactor will be automatically shut- down to stop the feed into the incinerator. In the event that this automatic shutdown mechanism fails to operate, the off-gas from the reactor will be vented to the atmosphere through the incinerator stack and the residue will be accumulated inside the incinerator. Under this scenario the main pollutants that will be vented to the atmosphere are MA,CO and butane gas.The maximum concentration of CO is still within the 35 mg/Nm3 limit stipulated in MAAQG. The maximum concentration of hydrocarbon is also much less than the lower flammability limit of 1.8 % concentration. The maximum value of MA is much less than the 0.32 ppm odour threshold value of MA and the TWA 8 hour limit of 0.25 ppm (982 ug/Nm3). The results show that in the event there is a delay in shutting down the reactor when the incinerator fails, the emissions from the incinerator will still be within safe limit.

This study also looks into the situation where there is a leak in the pipe that feed the off-gas to the incinerator. Under this scenario, it is predicted that the area within the ½ km vicinity of the plant will be exposed to CO exceeding the 35 mg/Nm3 limit. The maximum concentration is still much lower than the IDLH limit of 1370 mg/Nm3 (1,200 ppm)

The highest concentration of C4H10 when this leakage occurs is 0.03%. This value is much lower than the 1.8% flammability limit.

WATER & WASTEWATER

The WWTP is able to cope very well with the existing wastewater treatment plant and storage has enough spare capacity to cope with the additional volume of wastewater from the proposed project.Storage of scheduled wastes is an integral part of the proposed project. Waste record keeping or inventory is essential for long

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term, smooth and safe operation. Improper storage of waste could lead to spillage and contamination of surface and ground waters. Storage of scheduled wastes has to be carried out in accordance to the EQ(SW)R 2005. Each storage point has to be designed to be easily accessible for maintenance. All labels have to be clearly visible at all times as required by the EQ(SW)R 2005. The label has to show waste type and warning sign.

NOISE

The existing noise levels at the plant boundary are below the required limit. The will not be any significant increase in the noise level after expansion as there will be no any additional equipment that generate significant noise level after expansion.

SOCIO ECONOMY

Since this site is located far from the residential areas and inside a designated industrial area, there will not be any impact to the surrounding communities.

RISK AND HAZARD ASSESSMENT

The acceptability of the proposed project can be judged by comparing the individual risk estimates with the risk associated with some commonly understood activities and accidents. In making this comparison, it is generally recognized that risk to which persons are exposed can be grouped into two distinct categories, i.e. voluntary and involuntary.

The proposed addition of a new oxidation unit only processes similar inventory. The risk estimated from hazards present at proposedexpansion project shows that the involuntary risk Contour does not encroach into sensitive areas, thus satisfying the risk tolerability criteria.

CONCLUSION

Based on the study that had been conducted on the environmental and safety issues that may arise from the proposed additional production facilities, it can be concluded that the cumulative impact of the proposed plant expansion does not pose any threat to its surrounding environment.

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