Petronas RAPID Project, Southern Johor, Malaysia
Malaysian oil and gas company Petroliam Nasional Berhad (Petronas) is developing a refinery and petrochemical integrated development project (RAPID) and other associated facilities in Pengerang, Southern Johor, Malaysia, through a project called Pengerang Integrated Complex (PIC).
Launched in May 2012, PIC is part of the larger Pengerang Integrated Petroleum Complex (PIPC) proposed by the Johor state government. Total investment for the PIPC project is approximately MYR97bn ($27bn), of which the RAPID project costs MYR57bn ($16bn) and the associated facilities require MYR40bn ($11bn).
A feasibility study along with site topographical survey and soil investigation work for the project were completed in October 2011. A front-end engineering design (FEED) study and an environmental impact assessment study have also been completed.
In April 2014, Petronas board of directors approved the final investment decision (FID) for the RAPID project. The refinery project is anticipated to be completed by early 2019. It is expected to employ 70,000 workers during construction and generate 4,000 new jobs upon completion.
RAPID project site details and facilities
Southern Johor was chosen as the location for the project due to its proximity to deepwater port facilities and regional demand centres. The location enables easy transport of finished products to the market. The complex will cover an area of 2,000ha and includes crude oil refinery and a petrochemical complex capable of processing 300,000 barrels per day (bpd). These two projects together will produce 7.7Mtpa of differentiated and speciality chemicals such as synthetic rubbers and high-grade polymers.
The RAPID project refinery will produce gasoline and diesel that will meet Euro 4 and Euro 5 fuel specifications. It will also supply feedstock for the petrochemical complex, which will produce highly specialised chemicals. The refinery will use modern technologies to produce these products and follow stringent environmental regulations.
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Associated facilities of Petronas PIC project
In April 2007 it was reported that Malaysia had developed a plan to build two refineries and a 320km pipeline in the north of the country in order to have a more integrated petroleum refining policy.
The PIC project includes construction of associated facilities including a naphtha cracker complex with a capacity of 3Mtpa of propylene, C4 and C5 olefins, and a petrochemical and polymer complex to produce C4 and C5 derivates.
An agreement was signed with Itochu and PTT Global Chemical in May 2012. The two companies will together develop a few downstream units of the complex.
In June 2012, Petronas and BASF signed an agreement to develop two projects including the RAPID project. Under the agreement, the two companies will build facilities for the production of polyisobutylene, isononanol, non-ionic surfactants and methanesulfonic acid. Some of these facilities will be part of the RAPID project.
BASF signed this agreement as part of its plans to generate 70% of its sales from the Asia Pacific region. It already operates the Gebeng complex along with Petronas through BASF Petronas Chemicals.
In January 2013, Petronas signed a partnership agreement with Evonik Industries to collaborate to develop chemical facilities that produce hydrogen peroxide, C4 co-monomer and oxo-products. The chemical plants will produce up to 250,000t/y of hydrogen peroxide, 220,000t of isononanol (INA) and 110,000t of 1-butene. These plants are expected to be operational by 2016.
In November 2014, Petronas broke ground for a Pengerang co-generation plant (PCP) in the PIC complex. The PCP will have four co-generation units and generates 1.22GW of electricity and supplies power to the entire PIC complex. It will also provide a continuous supply of steam up to 1,480t an hour for plants within the complex. The first co-generation unit is expected to become commercially operational by mid-2017.
The PCP is being constructed by a consortium of three firms, including Siemens AG, Siemens Malaysia and MMCEngineering.
Petronas, in November 2014, awarded a contract to construct polypropylene (PP) plant in the RAPID complex to an US-based LyondellBasell's Spherizone and Spheripol polypropylene process technologies. The PP plant will produce a wide range of PP products and will have a production capacity of producing 900,000t/y.
Petronas is also exploring the viability of constructing a liquefied natural gas (LNG) terminal to support the RAPID project. The LNG terminal will include natural gas receiving facilities for LNG carriers and a tie-in to the Peninsular Gas Utilisation system.
Other ancillary projects include air separation unit, raw water supply project (PAMER), crude and product tanks, and centralised and shared utility facilities.
The engineering, procurement, construction and commissioning (EPCC) contract for a refinery package was awarded to Tecnicas Reunidas, in August 2014. Punj Lloyd received a $581m contract from Petronas for RAPID Tank Farm project in September 2014.
In a joint venture with Fluor, Technip was preferred to provide engineering, procurement and construction management (EPCM) services for the project, in October 2014.
In September 2015, Mudajaya Groupr was awarded a $113m (MYR489m) EPCC contract to build a workers village and temporary structures for the utilities, interconnecting and off-site (UIO) facilities for the project. The EPCC works are scheduled to complete by 2017.
Expansion of the petrochemical industry in Malaysia
The project will help Petronas to produce premium petroleum products and speciality chemicals. Demand for such high-value products is increasing, especially in the Asia Pacific region. The RAPID project will enable Petronas to meet this demand for the next 20 years.
Development of the project is also in line with Malaysia's aim to establish new areas of growth, aimed towards improving people's quality of life. The petrochemical industry has been identified as the main sector for achieving this growth.
The RAPID project is expected to help transform Southern Johor into a new petrochemical hub. Several employment opportunities are also expected to be created in the region by suppliers and related industries.
Petronas already operates petrochemical complexes in Melaka, Kertih and Gebeng. The RAPID project is much larger than the existing complexes, and is expected to spur economic growth in the region, as well as attract domestic and foreign direct investments into the country.