Petroliam Nasional Berhad (PETRONAS), the national oil company of Malaysia, and Saudi Aramco, the national oil company of Saudi Arabia, are pleased to announce the formation of two joint ventures for the Refinery and Petrochemical Integrated Development (RAPID) project.
The strategic alliance is a historic partnership between two of the largest and most successful national oil companies in the world, bringing together the resources, technologies, experience, expertise and commercial presence.
Petroliam Nasional Berhad (Petronas) which was established in 1974 is Malaysia’s fully integrated oil and gas multinational ranked among the largest corporations on FORTUNE Global 500®. While Saudi Aramco is a leading global integrated energy and chemicals company that produces approximately one in every eight barrels of the world’s oil supply to developing new energy technologies.
These joint ventures allow the parties equal ownership and participation in the operations of the refinery, cracker and selected petrochemical facilities in RAPID, which is part of the Pengerang Integrated Complex (PIC) in Malaysia’s southern state of Johor.
Through this collaboration, Saudi Aramco will supply 50 per cent of the refinery’s crude feedstock requirements with the option of increasing to 70 per cent. Meanwhile, natural gas, power and other utilities will be supplied by PETRONAS and its affiliates. The parties will share the rights to offtake the production of the joint ventures on an equal basis.
The refinery, which has a capacity of 300,000 barrels of crude per day, will produce a range of refined petroleum products, including gasoline and diesel, which meet Euro 5 fuel specifications. It will also provide feedstock for the integrated petrochemical complex, with a nameplate capacity of 3.3 million mtpa.
Currently 87 per cent completed, the PIC project is on track for refinery start-up in Q1 2019.
“PIC has been an amazing journey for PETRONAS. This fast-track integrated development has reached peak construction this year and moving into pre-commissioning and commissioning activities soon,” said Executive Vice President & CEO Downstream, PETRONAS, Datuk Md Arif Mahmood.
“The partnership with Saudi Aramco is the result of the collective effort of key stakeholders in the two governments in addition to the two companies. We welcome Saudi Aramco’s participation and look forward for a successful joint venture.”
Arif added that once operational, RAPID will not only strengthen PETRONAS’ ability to be flexible and reliable in meeting customers’ needs, but also bolster the company’s position as the largest glycol and polypropylene producer, as well as the second largest HDPE and isononanol producer in South East Asia.
Commenting on the partnership, Saudi Aramco Senior Vice President of Downstream, Abdulaziz Judaimi said:
“This agreement strengthens Saudi Aramco’s position and growth in South East Asia through crude supply and world-scale downstream operations. Through this venture, we will also achieve a high degree of integration between refining and petrochemicals, with petrochemicals production will be more than 20% of crude intake. It is also in tandem with our downstream growth strategy where we are investing in a global refining and petrochemicals system of strategically located world-scale manufacturing complexes with participated refining capacity of eight to ten million barrels per day.”
He added that the partnership with PETRONAS will also pave the way for future collaboration between the two companies.
PIC is located on a 6,239 -acre site about 400km south of the capital city of Kuala Lumpur, forming part of Malaysia’s ambitious 22,000-acre Pengerang Integrated Petroleum Complex (PIPC) project to establish new engines of growth and push the nation into a new frontier of technology and economic development in the oil and gas downstream sector.
Apart from the refinery, cracker and the petrochemical facilities, PIC also includes the development of associated facilities namely a co-generation plant, an LNG re-gasification terminal, a raw water supply plant, a deep water terminal, an air separation unit as well as centralized and shared utility facilities. -BERNAMA