PCG to finalise Malaysia RAPID project line-up by end-‘15

Interview article by Nurluqman Suratman

KUALA LUMPUR (ICIS)–Malaysia’s PETRONAS Chemicals Group Berhad (PCG) is planning to finalise investment plans for the Refinery and Petrochemicals Integrated Complex (RAPID) in southern Johor state by the end of this year, the company’s president and CEO said on Tuesday.

“Our team has already started evaluating which are the areas what we want to participate in… By the end of this year, we will most likely know and finalise our participation in RAPID,” Sazali Hamzah told ICIS on the sidelines of the 18th Asia Oil & Gas Conference (AOGC) in Kuala Lumpur. 

The petrochemical product slate for RAPID will only be finalised following completion of the complex’s design configuration, as well as the engineering, procurement and construction (EPC) of the refinery and cracker that will be operated by PETRONAS, Sazali said.

Malaysia’s oil and gas major PETRONAS is the parent firm of PCG.

The $16bn RAPID project is slated to start operations in the middle of 2019, PETRONAS CEO Wan Zulkiflee Wan Ariffin said at the AOGC event.

RAPID is part of the proposed Pengerang Integrated Petroleum Complex (PIPC), which will consist of a 300,000 bbl/day refinery and a petrochemical complex.

EPC contracts for other petrochemical units within RAPID have yet to be awarded, Wan Zulkiflee said.

If given approval to handle all the petrochemical projects under RAPID, PCG’s overall capacity will nearly double, with some 7.7m tonnes/year of new products expected to come on stream upon the project’s completion, Sazali said.

The project’s product slate will include key feedstocks, polymers, as well as other derivative products and specialty chemicals, he said.

RAPID’s output may include synthetic rubbers and high-grade polymers, according to the Malaysian Petrochemicals Association.

Meanwhile, PCG has finalised its other key projects in other parts of Malaysia that are due to come on stream in the near term – the Sabah Ammonia Urea (SAMUR) project in Sipitang, Sabah and a new world-scale 2-ethylhexanoic acid (2EHA) plant in Kuantan, under BASF PETRONAS Chemicals – a joint venture with German producer BASF.

These two projects are expected to be completed sometime next year, Sazali said.

BASF PETRONAS Chemicals is also expected to start operations at its new integrated aroma ingredients complex in Kuantan, by the end of 2016, he said.

PCG had set a capital expenditure budget of Malaysian ringgit (M$) 3bn for this year and next year, excluding funding for RAPID projects.

For the full year of 2015, PCG’s net profit will likely fall below the levels reported in 2014 because of lower product spreads but should improve next year with new production coming on stream, Sazali said.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections