Petronas RAPID Project, Southern Johor, Malaysia
Malaysian oil and gas company, Petroliam Nasional Berhad (Petronas), is undertaking a refinery and petrochemical integrated development project (RAPID) in Pengerang, Southern Johor, Malaysia. Launched in May 2012, the RAPID project is being developed at a cost of RM60bn ($20bn).
A feasibility study along with site topographical survey and soil investigation work were completed in October 2011. A front-end engineering design (FEED) study and an environmental impact assessment study are currently being carried out for the project.
Following the completion of FEED, a final investment decision is expected to be reached by mid-2013. Completion of the project is anticipated towards the end of 2016.
Nearly 40,000 workers are expected to be required during construction of the project. The project will generate 4,000 new jobs after 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 2,000 hectares and includes a 300,000 barrels per day (bpd) crude oil refinery. It will produce 9 million tonnes of petroleum products and 4.5 million tonnes of petrochemicals per year.
The RAPID project refinery will produce gasoline and diesel which 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.
The complex includes a naphtha cracker which will produce 3 million tonnes of ethylene, propylene, C4 and C5 olefins annually. It also includes a petrochemical and polymer complex which will produce C4 and C5 derivates. Other infrastructure includes pipelines, storage tanks and warehousing facilities.
The ongoing FEED study will provide the configurations of various units of the complex and the investment required for each unit.
Petronas is also exploring the viability of constructing a liquefied natural gas (LNG) terminal and a co-generation power plant 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.
Agreements with Itochu, PTT Global Chemical Public Company and BASF
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.
Petronas is seeking 10-12 partners to implement the project. It is planning to finalise the partners before taking the final investment decision. Petronas has already signed agreements with three partners.
An agreement was signed with Itochu and PTT Global Chemical Public Company in May 2012. The two companies will partner to 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, 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.
Expansion of the petrochemical industry in Malaysia
The project will help Petronas to produce premium petroleum products and specialty 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.
Technip was awarded the FEED contract for the project. The contract will be completed in 2012.