Saudi Aramco invests US$7bn in RAPID

SAUDI ARAMCO is investing US$7bn (RM31bn) in PETRONAS’ Refinery and Petrochemical Integrated Development (RAPID) project in Johor, Malaysia.

The share purchase agreement (SPA) was signed between Amin Nasser, Saudi Aramco’s president and CEO, and Datuk Wan Zulkiflee Wan Ariffin, PETRONAS president and group CEO, during a state visit to Malaysia by Saudi Arabia’s King Salman Bin Abdulaziz Al Saud. The ceremony was witnessed by King Salman and Malaysia’s prime minister, the Honorable Dato’ Sri Najib Tun Abdul Razak.

Najib confirmed the size of the investment to journalists in a short news conference on 27 February, after the deal had been reached but before the paperwork had been signed.

The 300,000 bbl/d RAPID refinery’s products will include petrol, diesel and feedstock for the adjoining petrochemical complex, with a total output of 3.5m t/y of products. The refinery is on course to begin operations in 2019, and RAPID is part of the wider Pengerang Integrated Complex (PIC). PIC covers more than 2,500 ha and includes a co-generation plant, an LNG re-gasification terminal, a deep water terminal, and utilities.

The partners say that the agreement marks the start of “a strategic, mutually beneficial relationship providing RAPID with high-impact strengths and synergies from both Saudi Aramco and PETRONAS”. Saudi Aramco will supply up to 70% of the RAPID refinery’s petroleum feedstock, while PETRONAS will supply natural gas, power and other utilities.

Wan Zulkiflee said that the signing of the deal was a “truly historic moment for the industry”, with two leading national oil companies embarking on a greenfield project.

“Malaysia offers tremendous growth opportunities and today’s agreement further strengthens Saudi Aramco’s position as the leading supplier of petroleum feedstock to Malaysia and Southeast Asia, and with RAPID’s strategic location in a prolific hub, it would also serve to enhance energy security in the Asia-Pacific region. Together with Malaysia, the Southeast Asia region offers tremendous growth opportunities,” said Nasser.

Earlier in January, the media reported that Saudi Aramco had pulled out of the RAPID project. PETRONAS would not at the time comment directly on the claims, but did release a statement assuring stakeholders that the project was on track. The new deal vindicates PETRONAS’ claims.