Petronas, Aramco to fi­nal­ize RAPID deal af­ter re­solv­ing tech­ni­cal is­sues

Chemical Industry Digest - - News & Views -

Malaysian

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.

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