- Corporate News
PETRONAS, Saudi Aramco form two new joint ventures in Malaysia
Petroliam Nasional Berhad (PETRONAS), the national oil company of Malaysia, and Saudi Aramco, the national oil company of Saudi Arabia, have formed two joint ventures for the Refinery and Petrochemical Integrated Development (RAPID) project. 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% of the refinery’s crude feedstock requirements with the option of increasing to 70%. 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 fuel, which meet Euro 5 fuel specifications. It will also provide feedstock for the integrated petrochemical complex, with a nameplate capacity of 3.3 million metric tonnes per annum (mtpa).
Currently 87% complete, the PIC project is on track for refinery start-up in the first quarter of 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.”
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.
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.