Aramco to acquire 50% stake in Petronas polymers project

Dhahran, Saudi Arabia – Saudi Aramco is paying around $900 million (€765 million) to acquire a 50% stake in the Petronas Chemicals Group (PCG) polymers project within the Petronas Pengerang Integrated Complex, Aramco announced 2 Oct.

The transaction for the project currently under construction in the southern Malaysian state of Johor near Singapore is expected to close on 15 March 2018.

In February, Aramco agreed to invest $7 billion to acquire a 50% stake in Petronas’s Refinery & Petrochemical Integrated Development (RAPID) refinery and steam cracker within the Pengerang complex.

The project includes a 300,000-barrel/day refinery that will also produce 600 kilotonnes per annum (ktpa) of propylene, and a steam cracker designed to produce 1,300ktpa of ethylene, 609ktpa of propylene, 185ktpa of butadiene, and 250ktpa of raffinate-1.

Whit this latest deal, Aramco will gain an equal stake in a downstream complex with plants producing 900ktpa of polypropylene, 400ktpa of high-density polyethylene and 350ktpa of linear low-density polyethylene. The company is also, reportedly, considering establishing synthetic rubber production facilities linked to the butadiene unit.

The new agreement strengthens Saudi Aramco’s position and growth in south east Asia through crude supply and world-scale downstream operations, according to said Saudi Aramco VP international operations, Said Al-Hadrami.

“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,” he said. “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.”

For Petronas, VP and PCG MD/CEO, Datuk Sazali Hamzah said: “The petrochemicals projects in PIC is one of the largest growth projects for PCG and PETRONAS’ largest downstream investment on a single site to date. 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.”

With regard to the petrochemicals projects in PIC, Sazali said that as of August, the PIC development was at about 75% overall project progress, with the first petrochemical production expected to commence after the completion of the refinery, which is scheduled in 2019.

“By 2020, our petrochemicals projects under PIC will provide a strong foundation for us to move into derivatives and specialty chemicals,” he added. “Beyond 2020, PCG will also focus on assessing opportunities in downstream derivatives and specialty chemicals at Pengerang, Kertih, Gebeng and East Malaysia.”