March 28, 2018 / 2:16 PM / in 3 months

Saudi Aramco finalizes refinery deal with Malaysia's Petronas

DUBAI (Reuters) - Saudi Aramco [IPO-ARMO.SE] finalised a deal on Wednesday with Malaysian state energy company Petroliam Nasional Berhad (Petronas) to invest in a refinery project off Malaysia.

FILE PHOTO: Logo of Saudi Aramco is seen at the 20th Middle East Oil & Gas Show and Conference (MOES 2017) in Manama, Bahrain, March 7, 2017. REUTERS/Hamad I Mohammed/File Photo

Saudi oil giant Aramco agreed in February last year to buy a $7 billion stake in Petronas’s [PETR.UL] Petrochemical Integrated Development (RAPID) project, but the issue was then delayed by “technical issues”.

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.

FILE PHOTO: A logo of a Petronas fuel station is seen against a darkening sky in Kuala Lumpur, Malaysia February 10, 2016. REUTERS/Olivia Harris/File Photo

The two companies said in a statement that they signed the deal on Wednesday but did not confirm the value of Aramco’s investment.

Saudi Aramco will supply 50 percent of the refinery’s crude oil with an option of increasing it to 70 percent, the statement said.

The development 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 afterwards.

Reporting by Aziz El Yaakoubi; Editing by Susan Fenton

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