Malaysia's state-owned energy giant Petronas plans to build a $20 billion integrated refinery and petrochemicals complex in Southern Johor, in a move designed to expand its petrochemicals business and spur the growth of the country's downstream sector, it said Friday.
The new development, to be known as RAPID (Refinery and Petrochemicals Integrated Development), will include a 300,000 b/d refinery; a naphtha cracker with a capacity to produce 3 million mt/year of ethylene, propylene and olefins; and a petrochemicals and polymer complex that will produce differentiated and highly specialized chemicals, Petronas said.
The project, which is still at the detailed feasibility stage, is expected to be commissioned by 2016, it added.
"The proposed project presents an opportunity for Petronas to further expand and diversify its petrochemical business through volume growth, a more diversified products base and a move into high value and premium speciality chemicals market," the company said.
Petronas said that it had selected Southern Johor because of its strategic location, being near deepwater port facilities, international shipping lanes and regional demand centers.
The 300,000 b/d refinery will take Petronas' total refining capacity to 748,000 b/d, including its plant in South Africa. It will nearly double the company's domestic refining capacity to 623,000 b/d across four plants, and will take Malaysia's refining capacity to 935,300 b/d.
The new refinery will produce Euro 3 and Euro 4 compliant fuels, enabling the company to capture export markets, the company said.
To support the development, Petronas is also looking at the possibility of building a new LNG import and regasification terminal in the area, the company said.
The LNG facility will not only support the energy needs of the complex but will also contribute to the efforts to diversify the sources of gas supply to meet the existing and future gas demand in Peninsular Malaysia.
The new LNG regasification terminal will involve receiving facilities for LNG carriers and a new pipeline to tie in to the the existing Peninsular Gas Utilisation system.
The Johor LNG import terminal would be the company's second such project. Petronas' subsidiary, Petronas Gas, is planning to build a 3.8 million mt/year import and regasification terminal in Malacca on the west coast of Peninsular Malaysia. This terminal is expected to be completed by July 31, 2012.
Malaysian Prime Minister Najib Razak welcomed the RAPID project, which he said is expected to attract foreign direct investment, bolster private investment, and expand the country's access to world-class technologies.
"The challenges presented by a project of this magnitude are indeed formidable. But with Petronas' track record, I am in no doubt that they are up to the task," Razak said.
