The Refinery and Petrochemical Integrated Development (RAPID) refinery in Malaysia, a joint project of Petronas and Saudi Aramco, is due to come online by the end of this year, S&P Global Platts reports, citing Petronas chief executive Tan Sri Wan Zulkiflee Wan Ariffin.
The RAPID facility will have a processing capacity of 300,000 barrels of crude daily, with its petrochemicals production capacity standing at 3.3 million tons annually, the Petronas head said. The project costs US$27 billion and is one of Saudi Arabia's largest foreign investment projects since the announcement of the Vision 2030 diversification program. Like other refinery investments, it aims to secure long-term demand for Saudi crude amid prospects of a general decline on a global scale in the long run.
"We take the view that there will be demand for petrochemicals. There would be times of volatility but I think the price trend goes up. So we take a very bullish view," Tan Sri Wan Zulkiflee Wan Ariffin said, adding, "Construction is almost complete. We are pre-commissioning parts of the plant and we hope to be able to reach commercial operations by end of this year."
The Petronas head also said the companies had made "the bold decision" to proceed with the refinery at a time of depressed oil prices based on the forecasts of rising petrochemicals demand but also on the fact that the refinery will be close to Southeast Asian markets, and especially to China and India.
Saudi Arabia has already committed hefty investments in India, the biggest among them the US$44-billion refinery and petrochemical complex in Ratnagiri, which will be the largest in the country with a capacity of 60 million tons annually. Aramco is participating in the project together with Emirati Adnoc, sharing a 50-percent stake in the project.
The company also recently agreed to buy Shell's stake in a refining company, SASREF, for US$631 million as part of its expansion efforts in the downstream business.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More