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Petronas and Saudi Aramco set up two Rapid joint ventures
The Star
28th March, 2018
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) and Saudi Aramco, the national oil company of Saudi Arabia, have announced the formation of two joint-ventures for the Refinery and Petrochemical Integrated Development (Rapid) project, which is part of the Pengerang Integrated Complex (PIC) in Johor, Malaysia.

In its joint statement today, the companies said, the strategic alliance was a historic partnership between two of the largest and most successful national oil companies in the world, bringing together the resources, technologies, experience, expertise and commercial presence. “These joint-ventures allow the parties equal ownership and participation in the operations of the refinery, cracker and selected petrochemical facilities in Rapid.

“Through this collaboration, Saudi Aramco would supply 50% of the refinery’s crude feedstock requirements with the option of increasing to 70%, while natural gas, power and other utilities would be supplied by Petronas and its affiliates,” the statement said.

It said both companies would also share the rights to offtake the production of the joint-ventures on an equal basis.

“The PIC project is currently 87% completed, and is expected to be on track for refinery start-up in the first quarter of 2019,” it said.

Petronas executive vice president and chief executive officer downstream, Datuk Md Arif Mahmood, said PIC has been an amazing journey for Petronas.

“This fast-track integrated development has reached peak construction this year, and it will be moving into pre-commissioning and commissioning activities soon,” he said.

He said the partnership with Saudi Aramco was 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,” he said.

Arif said that once operational, Rapid would strengthen Petronas’ ability to be flexible and reliable in meeting customers’ needs and also bolster the company’s position as the largest glycol and polypropylene producer, as well as the second largest high-density polyethylene and isononanol producer in Southeast Asia.

Saudi Aramco downstream senior vice president, Abdulaziz Judaimi, said the agreement strengthened Saudi Aramco’s position and growth in Southeast 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,” Abdulaziz said.

He said that the partnership with Petronas would also pave the way for future collaborations between the two companies.

PIC is located on 2,525 hectares and is about 400km south of Kuala Lumpur, forming part of the 8,903 ha Pengerang Integrated Petroleum Complex project.

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, raw water supply plant, deep-water terminal, air separation unit as well as centralised and shared utility facilities. - Bernama