Petronas, Saudi Aramco Form Two New Joint Ventures In Malaysia

Petroliam Nasional Berhad (Petronas) and Saudi Aramco has announced the formation of two joint ventures (JV) for the refinery and petrochemical integrated development (RAPID) project.

The strategic alliance is a historic partnership between two of the largest and most successful national oil companies in the world, bringing together the resources, technologies, experience as well as expertise of two national oil companies with established commercial presence around the world.

These JV allow the parties equal ownership and participation in the operations of the new refinery and selected petrochemical facility, which is part of the RAPID project within Pengerang integrated complex (pic) in Malaysia’s southern state of Johor.

Through this collaboration, Saudi Aramco will supply 50 percent of the refinery’s crude feedstock requirements with the option of increasing to 70 percent. Meanwhile, natural gas, power and other utilities will be supplied by Petronas and its affiliates. The parties will share in the rights to offtake the production of the JV 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, which meet €5 fuel specifications. It will also provide feedstock for the integrated petrochemical complex, which is capable of producing 3.3 million tonnes per annum of petrochemical products.

Currently, 87 percent completed, the RAPID project is on track for refinery start-up in Q1 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 Datuk Md Arif Mahmood said executive vice president & CEO downstream, Petronas.

“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 and isononanol producer in South East Asia,” added Arif.

“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 greater than 20 percent 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,” added Abdulaziz Judaimi, Saudi Aramco senior vice president of downstream.