(adds details throughout)
HOUSTON (ICIS)--Malaysia’s state-owned energy firm PETRONAS has made a final investment decision to proceed with its proposed multi-billion dollar refinery and petrochemical project in Pengerang, Johor.
The $27bn Pengerang Integrated Complex (PIC) will include the $16bn world-scale Refinery and Petrochemical Integrated Development (RAPID) project, and integrated facilities that will require an investment of $11bn.
“PETRONAS undertook a rigorous review of the project, including independent third party assessments to ensure it meets our criteria for long-term profitable and sustainable growth,” company president and CEO Shamsul Azhar Abbas said in a statement issued on Thursday.
PIC, which will be developed within a 6,242-acre site in Johor, will consist of a 300,000 bbl/day refinery and a petrochemical complex, which is expected to produce 7.7m tonnes/year of various grades of products, including differentiated and specialty chemicals products, such as synthetic rubbers and high grade polymers, PETRONAS said.
Project construction is expected to begin upon the full handover of the project site to PETRONAS by the state government of Johor, it said.
“Based on the current progress, the project is poised for its refinery start-up by early 2019,” PETRONAS said in a statement issued on Thursday.
The final investment decision on the project clears out concerns about the project viability. The project, which was announced in May 2011, has faced delays, raising concerns that PETRONAS may eventually decide to scrap the project.
“This [final investment] decision is in line with our commitment to capital discipline, and with the board’s approval we look forward to progressing the development of the project as planned,” Abbas said.
The associated facilities that will be built at the site will include a power co-generation plant, a liquefied natural gas (LNG) regasification terminal and other ancillary facilities, it said.
“The project will further strengthen PETRONAS’ position as a key playerin the Asian chemicals market, focusing on key growth areas of differentiated and specialty chemicals and capturing the growing automotive, pharmaceutical and consumer products sectors,” the company said.
Within Malaysia, the PIC is expected to aid in meeting the growing demand for petroleum products and Euro 4M and Euro 5 specification fuels, the energy firm said.
“At the peak of its construction, the PIC Project is expected to have a workforce of about 70,000 people with varying skills and disciplines. In its operational stage, the PIC will require over 4,000 employees,” PETRONAS said.
Initial reporting by Stefan Baumgarten