Saudi Aramco finalises refinery deal with Petronas

The agreement between Petronas and Saudi oil giant Aramco was made last year but delayed by ‘technical issues’.

DUBAI: Saudi Aramco finalised a deal yesterday with state energy company Petroliam Nasional Berhad (Petronas) to invest in a refinery project off Malaysia.

Saudi oil giant Aramco agreed in February last year to buy a US$7 billion (RM27 billion) stake in Petronas’s Petrochemical Integrated Development (RAPID) project, but the issue was then delayed by “technical issues”.

RAPID a US$27 billion project located between the Melaka Strait and the South China Sea, conduits for Middle East oil and gas bound for China, Japan and South Korea.

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

Saudi Aramco will supply 50% of the refinery’s crude oil with an option of increasing it to 70%, 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 six to 12 months afterwards.