Petronas, Aramco to finalize RAPID deal after resolving technical issues
state energy company Petronas and Aramco are facing technical issues in finalizing the Saudi oil major’s $7 billion investment in a refinery project, but the deal will be completed soon.
Malaysian government is giving room to Petronas and Saudi Aramco to resolve several technical issues related to the investment agreement. Saudi Aramco agreed in February, during Saudi King Salman’s visit to Malaysia, to buy a $7 billion stake in the Refinery and Petrochemical Integrated Development (RAPID) project in the southern state of Johor.
“At the moment, there are certain terms that must be fulfilled by both parties and it’s an ongoing process. I expect it won’t be long for (Aramco) to release the funds for the project,” said Abdul Rahman, a minister in the Malaysian prime minister’s office. He said there were no major problems and that the investment will be made soon.
The minister did not say what the technical issues were, but recent moves by Petronas and Aramco seem to indicate the project is moving along. Last month, Aramco agreed to take a $900 million stake in petrochemical projects in the RAPID complex, expanding the agreement signed in February.
RAPID is a $27 billion project located between the Malacca Strait and the South China Sea, conduits for Middle East oil and gas bound for China, Japan and South Korea. It will contain a 300,000 barrel-per-day oil refinery and a petrochemical complex with a capacity of 7.7 million metric tonnes a year. Refinery operations are set to begin in 2019, with petrochemical operations to follow 6-12 months later.