Saudi Aramco to partner Petronas in RM87.8 billion Johor project?

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KUALA LUMPUR: Petronas is expected to bring in Saudi Arabian Oil Co, or Saudi Aramco, as its partner for a roughly USD21 billion (RM87.8 billion) refining and petrochemicals project in Johor.

The Wall Street Journal, quoting two people familiar with the matter, reported that Petronas would make a final decision on the possible partnership in December.

The WSJ said Petronas would offer the world’s largest oil firm a 50 per cent stake in the project which comprises a refinery, petrochemical plants and other related facilities.

If Petronas proceeds with the plan, the two companies will set up a joint-venture company in the first quarter of next year to run the project, with the refinery due to start operating in early 2019, according to the report.

The WSJ said Petronas declined to comment and Aramco wasn’t immediately available for comment.

It said the entry of Saudi Aramco, the world’s largest crude oil exporter, into the project would be a coup for Petronas.

The WSJ said as part of an economic transformation to contend with the prolonged drop in oil prices, Saudi Arabia is expected to partially list Saudi Aramco, estimated to be worth between USD2 trillion and USD3 trillion, in what could be the world’s largest-ever initial public offering, targeted for 2018.

Petronas had earlier said the refinery and petrochemical development would cost some USD12.7 billion while related facilities, ranging from raw-water supply to a liquefied natural gas regasification terminal, would cost another USD8.6 billion.