“We expect the US$7bil investment to be in by the end of this month,” he told reporters after announcing the update on the project in his opening speech at the four-day Offshore Technology Conference Asia in Kuala Lumpur yesterday.
Last February, Aramco signed a deal with Petronas, where it would invest US$7bil (RM31bil) for a 50% stake in its Rapid project, which is under construction at the Pengerang Integrated Complex (PIC).
The 6,242-acre PIC is Petronas’ largest downstream project and forms part of the larger Pengerang Integrated Petroleum Complex (PIPC).
The huge investment makes Aramco the single largest investor in Malaysia.
The project will include a 300,000-barrel-a-day refinery, which can produce fuels that meet Euro 5 emission standards, as well as provide feedstock for a connected petrochemical plant.
Importantly, the Aramco-Petronas deal, which compels Aramco to provide as much as 70% of the refinery’s feedstock requirements, has increased the certainty of the Rapid implementation without financial and crude supply problems.
This, in turn, means that the Rapid project has become more viable.
Furthermore, the availability of feedstock from the steam cracker plant may attract more downstream petrochemical plants to be constructed within PIPC.
Globally, Aramco is also looking to defend its status as the world’s biggest exporter and fend off rivals in Asia, which is the biggest market for its crude.
For Aramco, the deal is part of its long-standing strategy of investing in refining to help lock in demand for its crude.
Bernama reported that the PIC project was designed to produce premium differentiated petrochemicals to meet domestic demand for petroleum products and the Government’s future legislative requirements upon the implementation of the Euro 5 emission standards.
With an investment of US$27bil, PIC supports the Government’s overall Economic Transformation Programme and puts Malaysia in a strategic position to capitalise on the growing need for energy and commodity petrochemical products in Asia for the next 20 years. “This will spur the growth of Malaysia’s oil and gas downstream sector, pushing Malaysia into a new frontier of technological and economic development,” he said.
Abdul Rahman said Saudi Aramco’s investment demonstrated international investors’ confidence in Malaysia as a preferred destination. In February last year, Saudi Aramco had expressed interest to invest US$7bil in selected ventures and facilities located within the PIC.
The investment in Petronas’ Rapid would be its largest investment in greenfield refining and petrochemical manufacturing facilities outside Saudi Arabia.