Saudi Aramco signs strategic partnership with Petronas Chemicals
Saudi Aramco has entered into a strategic partnership with Petronas Chemicals Group Berhad (PCG). Under the terms of the venture’s share purchase agreement (SPA), signed between PCG and Saudi Aramco’s Aramco Overseas Holding Cooperatif U.A. (AOHC) subsidiary, the parties have equal ownership in PRPC Polymers Sdn Bhd (PRPC Polymers) within the PETRONAS Pengerang Integrated Complex (PIC) in the southern Malaysian state of Johor.
The agreement was signed by Saudi Aramco VP International Operations, Said Al-Hadrami and PETRONAS VP and PCG Managing Director/Chief Executive Officer, Datuk Sazali Hamzah.
“This venture leverages the historic partnership between Saudi Aramco and PETRONAS that was recently sealed during the visit of the Custodian of The Two Holy Mosques King Salman to Malaysia. Given PCG’s strength in the region’s petrochemicals sector, Saudi Aramco is proud to be entering into a deeper, mutually beneficial partnership in PIC,” said Al-Hadrami.
“This agreement strengthens Saudi Aramco’s position and growth in South East Asia through crude supply and world-scale downstream operations. Through this venture, we will also achieve a high degree of integration between refining and petrochemicals, with petrochemicals production greater than 10% of crude intake. It is also in tandem with our downstream growth strategy where we are investing in a global refining and petrochemicals system of strategically located world-scale manufacturing complexes with participated refining capacity of several million barrels per day.”
“The signing of this Agreement is truly a momentous milestone for the industry as it brings together two key leaders in petrochemicals, entering into a partnership in a world-scale greenfield project. We are proud to be joining hands with Saudi Aramco, a world leader in integrated energy and chemicals with an unrivalled track-record in mega-project execution and efficiency,” said Sazali.
First petrochemical production at PIC is expected to commence after the completion of the refinery, which is scheduled in 2019.
In February, Saudi Aramco and PETRONAS signed an SPA, allowing Saudi Aramco’s equity participation in PETRONAS’ Refinery & Petrochemical Integrated Development (RAPID) project, which gives both partners equal ownership in selected ventures and assets of the RAPID project within PIC.
The RAPID project is part of the PIC development undertaken by PETRONAS and is positioned to be a regional downstream oil and petrochemical industrial hub.
Under the partnership, Saudi Aramco will supply up to 70% of the crude feedstock requirements of the refinery, with natural gas, power and other utilities supplied by PETRONAS.