January 7, 2019 / 8:57 AM / 11 days ago

Petronas-Saudi RAPID refinery begins trials on crude oil unit: sources

A Petronas logo at their office in Kuala Lumpur, Malaysia August 15, 2017. REUTERS/Lai Seng Sin

SINGAPORE (Reuters) - Malaysian state oil company Petronas [PETR.UL] started trial runs at the crude distillation unit (CDU) for a joint-venture refinery with Saudi Aramco in Malaysia last week, two sources with knowledge of the matter said on Monday.

The move marks a major milestone for the $2.7 billion project known as RAPID - or Refinery and Petrochemical Integrated Development - located in Pengerang in Johor, at the southern tip of peninsular Malaysia. The test runs put the project on track for commercial operation in 2019.

The company also received its second cargo of 2 million barrels of Saudi crude last week, according to the sources and data on Refinitiv Eikon.

Petronas could not be immediately reached for comment.

RAPID consists of a 300,000 barrels-per-day (bpd) refinery and secondary refining units that will allow the companies to produce refined oil products that meet Euro 5 fuel specifications. The refinery is linked to a petrochemical complex with a capacity of 7.7 million tonnes a year.

The first crude oil cargo for RAPID was offloaded at Pengerang in September.

The refinery is one of four new complexes in Asia that represent a combined processing capacity of nearly 1.3 million bpd scheduled to start up from late 2018 to 2019.

Another of the four complexes, a 400,000-bpd refinery, owned by Hengli Petrochemical in Dalian in northeast China, started trial runs in December.

These plants will increase Asia’s crude demand while adding to fuel output in the region.

Reporting by Florence Tan; Additional reporting by A. Ananthalakshmi in KUALA LUMPUR; Editing by Tom Hogue

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