Aramco to buy interest in Malaysia’s RAPID project
Petronas has signed a share purchase agreement to sell Saudi Aramco a 50% ownership interest in its long-planned refinery and petrochemical integrated development (RAPID) project now under construction at the $27-28-billion Pengerang integrated complex (PIC) in southeastern Johor, Malaysia.
Petronas has signed a share purchase agreement to sell Saudi Aramco a 50% ownership interest in its long-planned refinery and petrochemical integrated development (RAPID) project now under construction at the $27-28-billion Pengerang integrated complex (PIC) in southeastern Johor, Malaysia (OGJ Online, June 27, 2016).
Signed during a Feb. 28 ceremony in Kuala Lumpur, the SPA lays the groundwork for a transaction that, once completed, will grant Aramco and Petronas equal ownership in selected RAPID ventures and assets, as well as establish Saudi Arabia as the primary supplier of crude feedstock for the project’s 300,000-b/d refinery, the companies said in separate releases.
Under the proposed partnership—which remains subject to regulatory approvals and completion of other unidentified, associated agreements—Aramco will provide as much as 70% of the refinery’s feedstock requirements, while Petronas will supply natural gas, power, and other utilities, Petronas said.
Alongside creating a strategic relationship between the two national firms to position PIC as Southeast Asia’s downstream oil and gas industrial hub and regional center for technology and economic development, the partnership also comes as part of an effort by both companies to enhance energy security throughout Asia Pacific, according to Amin H. Nasser, Aramco’s president and chief executive officer.
While local media outlets valued the SPA at $7-8 billion, neither Aramco nor Petronas disclosed official financial details of the proposed deal.
Situated on part of the Malaysian government’s 22,000-acre Pengerang Integrated Petroleum Complex 400 km south of Kuala Lumpur, PIC’s RAPID refinery will produce Euro 5-quality fuels to help Asia Pacific’s growing need for petroleum and petrochemical products, as well as naphtha-LPG feedstock for its integrated cracker and downstream petrochemical complex (OGJ Online, Sept. 20, 2016).
Additionally, PIC will house six associated facilities, including the Pengerang cogeneration plant, an LNG regasification terminal, an air-separation unit, a raw-water supply project, a deepwater terminal, and centralized-shared utilities and installations.
With overall construction of PIC nearly 60% completed as of Feb. 28, the RAPID refinery remains on schedule for startup in 2019, Petronas said.
Petronas most recently said it planned to commission the entire PIC development by early 2019 (OGJ Online, Jan. 13, 2017).
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