UPDATE 2-Malaysia Petronas plans $20b refining, petchem complex
* Complex to cost $20 bln, to be commissioned by end-2016
* Will boost country total refining capacity by half
* Aims to help meet Asian demand for specialty chemicals (Adds Petronas comments)
By Razak Ahmad
KUALA LUMPUR, May 13 (Reuters) - State-run Petronas will build a $20 billion integrated refinery and petrochemicals complex, Malaysia's largest single investment in recent years, that will boost the country's total refining capacity by half, to 935,300 barrels per day (bpd), as it looks to meet Asian demand for specialty chemicals.
The development in the southern state of Johor bordering Singapore, to be known as the Refinery and Petrochemicals Integrated Development (RAPID), is expected to be commissioned by the end of 2016. It will put Malaysia on track to vie with Asian oil hub Singapore, which has a refining capacity of about 1.3 million bpd.
"This commitment to an ambitious expansion in its downstream production capacity assuredly signifies the depth of Petronas' ambitions to capture the opportunities Asia's dynamic energy and chemical markets are expected to provide," Prime Minister Najib Razak said at the project's launch.
Petronas Chief Executive Shamsul Azhar Abbas said the complex would meet an expected surge in demand for differentiated and specialty chemicals in Asia, the main market for the products, while complementing Singapore's energy business.
"As far the market is concerned, the whole Asian region is going to be short of high specialty products, so this is meant for the region," Shamsul told reporters after the launch.
The project would expand Petronas' petrochemicals business and spur growth of Malaysia's downstream oil and gas sector, he said.
"More than 80 percent of the products are new products because we have not gone into full specialty product development," Shamsul added.
The RAPID project, which is at the detailed feasibility study stage, will comprise a crude oil refinery, a naphtha cracker and a petrochemicals and polymer complex.
The crude oil refinery will have a processing capacity of 300,000 bpd for the production of petroleum products such as gasoline, jet fuel, diesel and fuel oil, Petronas said.
The refinery would process mostly imported crude from various sources, including from Petronas' overseas production.
It would have a 3 million tonne per year (tpy) naphtha cracker and petrochemical derivatives complexes focusing on synthetic rubber.
The facility would also boost Petronas' production of petrochemical products from 6,200,000 kmtpa (thousand metric tonnes per annum) to 10,100,000 kmtpa.
Petronas said the project would take its total refining capacity to 748,000 bpd and its domestic refining capacity to 623,000 bpd. It would bring its petroleum products output to 140,200,905 barrels per year.
The project is the largest single investment in Malaysia in recent years. The biggest infrastructure project in Malaysia's history is an $11.5 billion mass rapid rail project that will be built this year.
The Southeast Asian country has been trying to lure new energy investments. In January, the government said oil giants Exxon Mobil Corp and Royal Dutch Shell Plc (RDSa.L) would invest 15 billion ringgit ($4.9 billion) in new oil, gas and energy assets in the country. [ID:nL3E7CB02X]
A net oil exporter with flagging output, Malaysia produced 1.61 million barrels of oil equivalent per day (boepd) in the third quarter of 2010/2011, down from 1.64 million boepd output for the same period last year. [ID:nL3E7E306T]
To support the development of RAPID, Petronas said it would consider building a new liquefied natural gas receiving and re-gasification terminal within the RAPID facility.
Shamsul said the $20 billion estimated cost of the project did not include the LNG re-gasification terminal and other ancillary facilities including a nearby power plant. He gave no cost details on the additional items.
Petronas has yet to decide on the project's international partners as it was still in the process of finalising the product stream for the complex, he said.
"Once that is finalised by September this year, then we will identify the right partners, because partnership depends on product stream and we would like to finalise that product stream first." (Editing by Liau Y-Sing and Ramthan Hussain)
- Alabama man gets $1,000 in police settlement, his lawyers get $459,000
- Doctor with Ebola in New York stable; nurse is virus-free
- New York police officer critically wounded in hatchet attack |
- Putin accuses United States of damaging world order
- Exclusive: Charred tanks in Ukraine point to Russian involvement