Saudi Arabian Oil Company (Saudi Aramco) has signed an agreement to purchase stake in Petroliam Nasional Berhad’s (Petronas) Refinery and Petrochemical Integrated Development (RAPID) project in Johor, Malaysia.
According to Reuters report, the stake is being purchased with an investment of $7bn.
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The share purchase agreement was signed by Saudi Aramco president Amin H Nasser along with Petronas president and group CEO Datuk Wan Zulkiflee Wan Ariffin.
Under the agreement, both companies will have equal ownership in selected ventures and assets of the RAPID project within the Pengerang Integrated Complex (PIC).
The transaction is subject to regulatory approvals and the completion of other associated agreements.
The RAPID project is part of the PIC development and expected to become a regional downstream oil and gas industrial hub.
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By GlobalDataSaudi Aramco president and CEO Nasser said: “Together with Malaysia, the South East Asia region offers tremendous growth opportunities and today’s agreement further strengthens Saudi Aramco’s position as the leading supplier of petroleum feedstock to Malaysia and South East Asia, and with RAPID’s strategic location in a prolific hub, it would also serve to enhance energy security in the Asia-Pacific region.”
Under the partnership, Saudi Aramco will provide up to 70% of the crude feedstock requirement for the refinery, while other utilities such as natural gas and power will be supplied by Petronas, reported Reuters.
Datuk Wan Zulkiflee Wan Ariffin said: “The PIC is one of the largest industrial developments in the region, as well as PETRONAS’ largest downstream investment on a single site to date.”
After completion, the RAPID refinery will have a daily capacity to refine 300,000 barrels of crude.
The refinery will produce petrol, diesel and other petroleum products that meet Euro 5 fuel specifications.
It will also feedstock for its integrated petrochemical complex, producing 3.5 million tonnes per annum of products.
RAPID will also comprise a cracker and the downstream petrochemical complex.
PIC is located about 400km from Kuala Lumpur, the capital of Malaysia.
The complex is approximately 60% complete and scheduled to commence operations in 2019.
