Petroliam Nasional Berhad (Petronas) and Saudi Aramco have formed two joint ventures (JVs) for the $7bn Refinery and Petrochemical Integrated Development (RAPID) project in the Malaysian state of Johor.
The two companies said that the joint ventures will enable them equal ownership and participation in the operations of the refinery, cracker and certain petrochemical facilities in the RAPID project.
As part of the collaboration, Saudi Aramco has committed to provide 50% of the crude feedstock needed by the refinery with the option of increasing it by an additional 20%.
Petronas and its affiliates, on the other hand, will supply natural gas, power and other utilities to the refinery.
Saudi Aramco and Petronas, on an equal basis, will share the rights to buy the production of the joint ventures.
Saudi Aramco downstream senior vice president 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.”
The RAPID refining and petrochemicals project, which is part of the $27bn Pengerang Integrated Complex (PIC), will have a capacity of 300,000 barrel-per-day. It will manufacture a variety of refined petroleum products like gasoline and diesel, which will meet Euro 5 fuel specifications.
RAPID will also supply feedstock for PIC, with a nameplate capacity of 3.3 million mtpa. According to the partners, the project has been completed 87% and is anticipated to begin operations in the first quarter of 2019.
Petronas downstream executive vice president & CEO Datuk Md Arif Mahmood said: “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.”
Last month, Petronas had signed a share purchase agreement (SPA) with Saudi Aramco, to enable the latter with an equity participation in the RAPID project.