Plans for the joint venture have been shelved because the two companies were unable to agree on the terms and conditions, the world's biggest chemicals maker, BASF, said Monday.
The proposed joint venture was called off on the basis of mutual understanding, BASF said in the statement, adding that both companies would remain committed to continuing their existing long-term partnership.
In March 2012, BASF and Petronas signed a letter of intent to construct and operate a joint production facility for specialty chemicals in Pengerang, Malaysia. The project was estimated to cost about 1 billion euros ($1.32 billion), and meant to enlarge already existing cooperation at the site.
The two companies didn't specify what exactly had caused the joint venture to be called off.
Branching out into nutrition
Also on Monday, BASF said it had acquired Norwegian fish oil producer Pronova in a bid to expand into the growing nutrition market.
"The acquisition is going to strengthen the positions of both BASF and Pronova as leading producers of Omega 3 fatty acid," BASF Chief Executive Michael Heinz said.
BASF has been able to buy out 97.7 percent of Pronova shares, offering 13.5 Norwegian kroner (1.8 euros) per share.
The buy-out, worth about 684 million euros, comes after BASF's 3.3-billion-euro takeover of German chemicals rival Cognis and Scottish firm Equateq, which are both active in the nutritional supplements market.
BASF said it expected the market of Omega 3 fatty acids, which prevent coronary and heart diseases, to grow by 8 percent annually until 2020 - www.dw.de