News from the sector of real estate in Brunei - Brunei has announced plans to build a $400 million methanol production plant, calling it a landmark step toward economic diversification in this tiny nation that relies heavily on oil and gas.

The Brunei Methanol Co., a joint venture between Brunei's state-owned PB Petrochemical Co. and Japan's Mitsubishi Gas Chemical Co. and Itochu Corp., signed agreements Thursday with other government and corporate parties for the plant's construction and technical services.

"The Brunei methanol plant will be one of the landmark projects ... of this generation," Energy Minister Awang Yahya said at the signing ceremony.

"It will be the first petrochemical plant in Brunei, and for the first time our gas will be used to manufacture other products," Awang said.

Oil and natural gas account for nearly half of the gross domestic product of this sultanate on Borneo island.

The methanol plant will have a production capacity of 850,000 metric tons (950,000 U.S. tons) per year, making it a major project by the standards of Brunei industry.

Construction is scheduled to begin in mid-2007, but it was not immediately clear when the plant would be operational.

Methanol, a chemical compound manufactured from methane, the chief component of natural gas, can be used in the making of products such as plastic household goods and industrial material.