PIC 90% completed, aims to capture petrochemical demand

The O&G facility comprises a refinery and cracker complex, and petrochemical facilities, which are 96.54% and 84.8% completed respectively

By MARK RAO / Pic By MUHD AMIN NAHARUL

THE Pengerang Integrated Complex (PIC) has achieved 90% overall progress as of April this year, positioning the project that is led by Petroliam Nasional Bhd (Petronas) to leverage on the growing demand for petrochemicals in Asia.

Located in Pengerang, Johor, the 6,239-acre (2,524.83ha) oil and gas (O&G) facility comprises a refinery and cracker complex, and petrochemical facilities, which are 96.54% and 84.8% completed respectively.

Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin (picture) said the PIC, which is the largest downstream project undertaken by the national energy company, is built to meet rising energy demand globally and in Asia.

“By 2030, it is forecast that 60% of the population will reside in urban areas. In line with this, global demand for energy and consumer goods is expected to sustain healthy growth rates,” he said in his speech at the PIC site yesterday.

He added that Asia as a region is poised to lead this upward trend, while continuing to position itself as a dynamic and vibrant market.

“With a relatively young population and a growing income base, the increasing demand for high-value products allows petrochemicals to tap into consumers’ ever growing need for improved quality of life,” he said.

The US$27 billion (RM106.92 billion) PIC includes the Refinery and Petrochemical Integrated Development (Rapid) and six associated facilities.

On March 28 this year, Petronas and Saudi Arabian Oil Co (Saudi Aramco) agreed to form two joint ventures (JVs) for the ownership and participation of the Rapid project.

State-owned oil giant Saudi Aramco invested US$7 billion in Rapid and will supply 50% of the refinery’s crude feedstock requirements with an option to increase that figure to 70%, while Petronas is to supply natural gas, power and other utilities.

Pengerang Refining Co Sdn Bhd and Pengerang Petrochemical Co Sdn Bhd are to be the JV companies undertaking works at the Rapid project, as announced during the launching ceremony between the two state-owned O&G companies yesterday.

The JVs will collectively be referred to as PRefChem and both Petronas and Saudi Aramco are to share the rights to offtake their production on an equal basis.

“This integrated partnership marks a visionary move by two professionally-run national oil companies where both are able to leverage on each other’s strengths and share technical capabilities as well as experiences for mutual benefit,” Wan Zulkiflee said.

Saudi Aramco president and CEO Amin H Nasser said the collaboration is an opportunity for the company to expand its downstream portfolio in Asia.

“PRefChem’s strategic location in Pengerang will clearly position Malaysia as a prolific regional energy hub, while at the same time serve to enhance energy security in the Asia-Pacific region,” he said at the same event.

He added that this venture also closely aligns with the company’s downstream strategy to invest in a global refining and petrochemicals system of world-scale manufacturing complexes in key regions with participated refining capacity of eight to 10 million barrels per day by 2030.

Since securing the final investment decision back in April 2014, the PIC remains on track to achieve completion within its five-year time frame by the end of 2019.

Refinery capacity is slated to come online by the first quarter of next year before full commercial operations kick in by October of the same year, adding some 300,000 barrels of crude oil per day to production.

The remaining two petrochemical plants and associated facilities are scheduled to begin operation by the end of 2019, bringing in additional capacities of 220,000 barrels per day of fuel and some 3.3 million tonnes per annum of petrochemical products.

Meanwhile, a press conference by Saudi Aramco and Petronas that was earlier scheduled was cancelled as neither party was willing to comment further on other related issues, particularly after the recent development after the recent election.

The PIC was a project initiated under the leadership of former Malaysian Prime Minister Datuk Seri Mohd Najib Razak but will now be under the purview of newly elected ruling coalition Pakatan Harapan.

This will see the project completed during the tenure of the recently sworn in Prime Minister Tun Dr Mahathir Mohamad.

Saudi Aramco was reportedly looking to pull out of the PIC project early last year, citing the project as generating insufficient returns for its investment.

The state-owned energy company then reasserted its commitment to the downstream project via its US$7 billion investment.