SQL Error [42601]: ERROR: syntax error at or near "where" Position: 234

MERGE /*+ parallel (16)*/ INTO psx_cluster_audit_t_1 a 
USING psx_cluster_cross_ref_t_1 b 
ON (
    a.psx_id = b.RECORD_ID
    AND a.PSX_BATCH_ID = b.PSX_BATCH_ID
    AND b.psx_batch_id = '2411121519014999'
)
WHEN MATCHED THEN 
    UPDATE SET a.mpc_new = b.mpc 
    WHERE a.mpc_new IS NULL;

try this one

You have a couple syntax errors and a totally superfluous/misleading comment. So:

• Postgres syntax does not accept a where clause within the when matched phase. Move it into the on phase.
• The update within the when matched phase must refer to only the table named in the into clause; therefore do not alias the column names.
• Finally this looks like it was originally an Oracle statement. The comment ( /*+ ... */) is how Oracle indicates a hint to its optimizer. In Postgres it's just does nothing and does nothing except perhaps cause confusion.

Taking all this your query becomes:

MERGE  INTO psx_cluster_audit_t_1 a 
USING psx_cluster_cross_ref_t_1 b 
ON (
    a.psx_id = b.RECORD_ID
    AND a.PSX_BATCH_ID = b.PSX_BATCH_ID
    AND b.psx_batch_id = '2411121519014999'
    and a.mpc_new IS NULL      -- where clause from WHEN MATCHED Phased
)
WHEN MATCHED THEN 
    UPDATE SET mpc_new = b.mpc; 

NOTE Not tested. No table description (ddl) nor test data supplied.