Malaysia’s state oil firm Petroliam Nasional Bhd (Petronas) and Saudi Aramco are expected to sign an agreement to collaborate in Malaysia’s Refinery and Petrochemical Integrated Development (RAPID) project, two industry sources said on Wednesday.
Petronas and Saudi Aramco, the state-owned oil company of Saudi Arabia, appear to be closer to agreeing to terms after sources told Reuters last month that Aramco was suspending a planned partnership in RAPID, a US$27 billion (S$38.3 billion) refining and petrochemical complex in Malaysia’s southern state of Johor.
An agreement is expected to be signed on Monday, said one of the sources who has knowledge of the matter and declined to be identified, during a visit by Saudi Arabia’s King Salman to Malaysia. Neither of the sources had any firm details on the particulars of the agreement.
Saudi Aramco declined to comment and a Petronas spokesman said the company could not “offer any comment at this point in time.” The RAPID project is designed to process 300,000 barrels a day of crude oil and produce 7.7 million tonnes a year of petrochemicals.
The facility is planned as part of Petronas’ Pengerang Integrated Complex that will include RAPID and oil storage facilities.
Petronas had said last month that RAPID is on track for start-up in 2019, and that its development had reached the 54 per cent progress mark to date.
The Malaysian state oil firm has been struggling with the slump in global oil prices and has cut its expenditures in the past year. It has also slashed its dividend payouts to the government. Petronas is expected to announce its fourth quarter results on March 14.