Saudi Aramco announced two joint ventures in with Petronas, for a refinery and petrochemical facility which will be part of Malaysia’s Refinery and Petrochemical Integrated Development (RAPID) project.
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, Saudi Aramco said in a statement. It will also provide feedstock for the integrated petrochemical complex, which is capable of producing 3.3 million tonnes per annum of petrochemical products.
As part of the joint-venture, Saudi Aramco will supply 50 per cent of the refinery’s crude feedstock requirements with the option of increasing it to 70 per cent. Meanwhile natural gas, power and other utilities will be supplied by Petronas and its affiliates.
Currently 87 per cent completed, the RAPID project is on track for refinery start-up in the first quarter of 2019.
Located on a 6,239 -acre site about 400km south of the capital city of Kuala Lumpur, the RAPID project forms part of Malaysia’s ambitious 22,000-acre Pengerang Integrated Complex under the Malaysian government’s Economic Transformation Programme 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 downstream petrochemical facilities comprising the RAPID project, the PIC also includes the development of associated facilities such as a co-generation plant, an LNG re-gasification terminal, a raw water supply project, a deep water terminal, as well as centralised and shared utility facilities.
“This agreement strengthens Saudi Aramco’s position and growth in South East Asia through crude supply and world-scale downstream operations,” Saudi Aramco senior vice president of Downstream, Abdulaziz Judaimi said. “Through this venture, we will also achieve a high degree of integration between refining and petrochemicals, with petrochemicals production greater than 20 per cent 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.
These joint ventures allow the parties equal ownership and participation in the operations of the new refinery and selected petrochemical facility. The two state-run oil companies will share in the rights to offtake the production of the joint ventures on an equal basis.
The alliance will bring together the resources, technologies, experience as well as expertise of two national oil companies with established commercial presence around the world.
“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 Datuk Md Arif Mahmood, executive vice president and downstream CEO of Petronas.
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.