Petronas, Saudi Aramco in 2 JVs on Rapid project

Aramco will supply 50% of the refinery’s crude feed stock requirements with an option of increasing that figure to 70%

By MARK RAO / Pic By MUHD AMIN NAHARUL

Petroliam Nasional Bhd (Petronas) and Saudi Arabian Oil Co (Saudi Aramco) have formed two joint ventures (JVs) for their ownership and participation in the Refinery and Petrochemical Integrated Development (Rapid) project.

Saudi Arabia’s state-owned oil giant Saudi Aramco will supply 50% of the refinery’s crude feed stock requirements with an option of increasing that figure to 70% under the agreements, while Petronas is to supply natural gas, power and other utilities for the downstream project.

Both parties are to share the rights to offtake the production of the JVs on an equal basis.

The JVs follow Saudi Aramco’s and Petronas’ closing in on the former’s US$7 billion (RM27.02 billion) investment in the Rapid project, with talks scheduled to be concluded by the end of this month.

Petronas executive VP and CEO for downstream Datuk Md Arif Mahmood (picture) said the facility will help enhance the national energy company’s position in the regional downstream market.

“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 high-density polyethylene and isononanol producer in South-East Asia,” Md Arif said in a statement yesterday.

Saudi Aramco senior VP of downstream Abdulaziz M Al Judaimi said the agreement will strengthen the company’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 petrochemical production to be more than 20% of crude intake,” he said in the same statement.

“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 million to 10 million barrels per day.”

According to Abdulaziz, the partnership with Petronas will pave the way for future collaboration between the two companies.

The Rapid project is part of the larger US$27 billion Pengerang Integrated Complex (PIC) located in southern Johor, and is slated to add some 300,000 barrels of crude oil per day in production come October next year.

To date, 87% of the PIC — which also includes six associated facilities on the 6,239-acre (2,524.8ha) site — has been completed with refinery capacity to come online by the first quarter of 2019.

The remaining two petrochemical plants and associated facilities are scheduled for commercial operations by end- 2019. This will bring in 220,000 barrels of fuel per day and 3.5 million tonnes of petrochemical products annually.

A range of refined petroleum products such as petrol and diesel, which are in line with Euro 5 fuel specifications, is to be produced from the refinery.

The facility, with a nameplate capacity of 3.3 million metric tonnes per annum, will also provide feedstock for the integrated petrochemical complex.