SINGAPORE (ICIS)--PETRONAS and Saudi Aramco have finalized a deal involving two joint ventures which will give both state-owned firms equal ownership of the Refinery and Petrochemical Integrated Development (RAPID) project in southern Malaysia, PETRONAS said late on Wednesday.
“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,” PETRONAS said in a statement.
Saudi Aramco had earlier in February 2017 signed a deal with PETRONAS for a 50% stake in the Rapid project.
Separately, PETRONAS subsidiary PETRONAS Chemicals Group (PCG) on Thursday said that it has completed the 50% stake sale in PRPC Polymers to a subsidiary of Saudi Aramco, Aramco Overseas Holding Cooperatif (AOHC).
The deal was first announced in October last year.
The PIC project is on track for refinery start-up in Q1 2019 and is currently 87% complete, the producer said.
Saudi Aramco will supply 50% of the refinery’s crude feedstock requirements with the option of increasing to 70%, it said.
Meanwhile, natural gas, power and other utilities will be supplied by PETRONAS and its affiliates, PETRONAS said.
The two companies will share the rights to offtake the production of the joint ventures on an equal basis, it said.
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.
The refinery will provide feedstock for the 3.3m tonnes/year integrated petrochemical complex.
“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 [high density polyethylene] and isononanol producer in southeast Asia,” said Md Arif Mahmood, PETRONAS’ executive vice president and CEO of its downstream unit.
Petrochemicals production at the site will make up more than 20% of its crude intake, said Abdulaziz Judaimi, Saudi Aramco’s senior vice president of downstream.
The partnership with PETRONAS goes “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.