The matter of Petronas executive VP Md Arif Mahmood (photo above) defence of the RAPID project has been previously explored in the article:
RAPID refinery " needs a specific type of crude oil "-Petronas executive VP Md Arif Mahmood explains why RAPID refinery will not be as advanced as public were led to believe
Readers will note from the comments to the above article that there has been an attempt to deny that Arif ever uttered those word.To quote one " Nadia" this writer is "putting words in others' mouths..... And saying things that they did not say?
Be that as it may, Arif said even more.To the question put to him by Malay Mail Online:
There have been people saying the top management of Petronas was actually unwilling to do this joint venture?
I don’t know how they report this but I think information has to come from credible sources.
Here readers can see for themselves precisely whose credibility it is that Arif questions, in the linked references from The Star,quoted in this writer's article titled
PETRONAS CEO Wan Zulkiflee May Be Sacked, And An EPF Bail Out Of RAPID Likely The Implications Of PM Najib's Claims Of Economic Sabotage.
Having said that, Arif is on a roll, and one must not stop him. He has also said :
On the matter of feedstock, given that the RAPID refinery " needs a specific type of crude oil ":
If you look at this region, nothing comes close to the Pengerang project. If anything, you will hear about the expansion of refineries, or they may or may not come onstream. This is as real as it can be.
At this point, the level of hyperbole, which one would not expect from a national oil company, becomes too much to bear and readers are simply referred to these projects in Singapore.
On the matter of feedstock, given that the RAPID refinery " needs a specific type of crude oil ":
On the matter of storage,and thus access to feedstock:
The Jurong Rock Caverns, being built 150 metres underneath petrochemical hub Jurong Island, will be taller than a nine-storey building and store almost 1.5 million cubic metres of oil -- the capacity of 600 Olympic swimming pools.
The real question here is this:Why the over the top attempt to justify Pengerang and RAPID? Is the real issue here cost over-runs, that now need to be justified?
END
Money
Nothing in this region comes close to Pengerang
‘We need crude, and we were looking for partners who can actually secure us supply of crude,’ Arif said. — Picture by Ahmad ZamzahuriKUALA LUMPUR, March 27 — In an interview with the Malay Mail recently, Petronas downstream chief executive officer and group executive vice president Md Arif Mahmood elaborated further on the Aramco deal in the Refinery and Petrochemical Integrated Development (RAPID) project and explained why the company was not forced to enter the deal with Aramco as well as the need for Petronas to look into regional demands for oil and gas.
With the recent signing of the agreement with Aramco, how are things going at RAPID?
Just to be clear, RAPID is just a part of the whole Pengerang project. The whole complex today has progressed by 60 per cent and we are doing well. The Aramco deal is actually a share purchase agreement of 50 per cent of RAPID, which means they have signed up to be our partner in this project.
At this stage, it revolves around the refinery and the cracker.
When you say RAPID, what do you mean?
The refinery, the cracker and petrochemicals. After that, we have the regassing facilities, power plant and a lot more.
Is the project 60 per cent complete?
So far the progress has been good, and it is progressing as planned.
When will it be completed?
We are still on track, and the plan is to get it operational by 2019.
Would RAPID be refining only Aramco crude following this deal?
Since the partnership is 50-50, and with this, Aramco will supply at least 50 per cent of the 300,000 barrels of crude oil to be refined at RAPID.
What will be the use of the fuel refined at RAPID?
The intent is to predominantly supply the domestic market but eventually, it will be for regional distribution.
Why Aramco? No one has asked this question.
Actually, looking for partners for such a project is a given thing. Both partners are leveraging their strengths and managing risks at the same time. Not many people are aware of this — the discussions between Petronas and Aramco have been ongoing for some time.
Actually, they had a look at this venture beginning in 2014. At that time, we had just cleared the site, and they were then keen on both the project and on the country itself — that is the stability of Malaysia. The discussions with the Saudis took more than two-and-a-half years.
They looked at the due diligence on the investment opportunities. It is not like it was only yesterday when we decided to partner Aramco.
But if you look at ‘Why Aramco’?: It is the biggest crude supplier in the world, with 10 million barrels a day. This refinery needs a specific type of crude oil that will allow us to make the necessary cut to supply to the petrochemical plant.
To have a crude supplier as a partner, for long-term crude security, that itself is a good reason for Aramco.
Was it Petronas looking for Aramco or Aramco looking for Petronas?
You see, it was a mutual thing. We need crude, and we were looking for partners who can actually secure for us supply of crude. They need partners who will help them extend their downstream business, especially in Asia Pacific.
You see, it was a mutual thing. We need crude, and we were looking for partners who can actually secure for us supply of crude. They need partners who will help them extend their downstream business, especially in Asia Pacific.
If you look at this region, nothing comes close to the Pengerang project. If anything, you will hear about the expansion of refineries, or they may or may not come onstream. This is as real as it can be. Then on top of that, you see, Aramco has done this kind of integrated complex many times already with their partners.
Of course this was mainly in Saudi Arabia, not outside of the country. That experience they have is also beneficial to us. With their interest in growing their own downstream business, they wanted to see that here too, and I think this is the perfect match in that sense.
A lot of people think it is an overnight thing, but it is not since it is something we have been discussing for quite an extended period. I presume there are no changes to plans and design of the project even with the entry of Aramco?
Because you see, although it is a greenfield project, the project is already progressing well so you do not make changes when it is ongoing. But they have provided inputs to us from their experience on what is it that we should be doing in order to enhance the project further.
This was even before the deal was signed?
Even before that. We discussed this. Like in any venture, we have the technical, commercial as well as crude supply teams in discussion.
People are asking whether you are forced to do this venture?
No. How can we be forced to do this deal? We were looking for a partner that would complement the project and that is the obvious criteria when you are looking for partners.
There have been people saying the top management of Petronas was actually unwilling to do this joint venture?
I don’t know how they report this but I think information has to come from credible sources. I think we can always speculate about a lot of things. Things like, for example, why are we selling this? We are not selling this.
We are looking for partners to invest and co-invest. And selling and co-investing are very different. And then they say top management are forced into this JV. This is going to be a long-term marriage; we are not going to be forced into this.
I am going to make this very clear. It had to be with agreeable terms, not only for us but also for Aramco before we could actually get to the stage where we are now.
References
Market outlook: Feedstock flexibility key from ExxonMobil in Singapore
31 January 2014 10:01 Source:ICIS Chemical Business
ExxonMobil is using innovative technology in Singapore to enable it to crack crude oil and other streams
ExxonMobil says as many as 50 refinery streams move backwards and forwards between its expanded cracker and refinery in Singapore. The company has pushed the envelope on steam cracking still further to crack crude oil and eliminate the reliance on expansive naphtha or other costly liquid feedstocks.
ExxonMobil’s advances open new Asian markets
Copyright: Exxon Mobil
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ExxonMobil built the world’s first steam cracker in the US in the 1940s and has been developing its own steam cracking technology since.
The current head of the energy giant’s chemicals business, Stephen Pryor, says the new Singapore cracker can process an unprecedented range of feedstocks, from light gases to heavy liquids.
“In fact, it is the first steam cracker that can use crude oil as a feedstock,” he said. “It is ExxonMobil’s biggest advance in steam cracking since we invented the process some 70 years ago.”
That degree of flexibility, and the product streams that will be available from the plant, are helping the company target a wider range of growing markets in East Asia. “ExxonMobil views the Singapore complex as a platform for future growth,” according to Pryor.
ADDITIONAL DERIVATIVESAlongside products it has made historically, the company has looked at what additional derivatives it might want to produce. There are plans to make halobutyl rubber from the C4 streams from the cracker and tackifying resins from C5s.
The complex includes a 300,000 tonne/year specialty elastomers plant and Singapore will become ExxonMobil’s global supply point for these products.
The company believes ethylene is heading for oversupply in Asia and has voiced concerns about lengthening derivatives markets, particularly as new capacities come on-stream in the US based on shale gas and in China based on coal.
“Asia remains at the bottom of the cycle. We’ll be in a challenging environment for a while and the extent to which the shale phenomenon [in the US] will add to that challenge – that’s a fact of life too,” Pryor said.
Its push into specialties and the broadened cracker feedstock capability would be hedges against a more challenging period for the industry.
UPBEAT ABOUT THE LONG TERMExxonMobil is convinced, however, that the long-term fundamentals for the chemicals business remain strong. Regional demand for its metallocene polyethylenes (PE), for instance, is expected to grow 1.5 to 2.0 points higher than GDP.
Global chemicals demand is expected to grow by 50% over the next decade with two thirds of that growth in Asia-Pacific.
The innovations that have been the driving force behind the capacity expansions in Singapore show what can and has to be achieved by petrochemical producers if they want to remain competitive.
The shale revolution in the US has been a huge driving force for change in the sector, prompting a wave of capacity expansions and new project announcements.
But Pryor has talked before about the game-changing nature of shale and put the rush to add new shale-gas based petrochemicals capacity into perspective.
“The idea that the shale feedstock advantage will always be so large overlooks the dynamic nature of energy and chemical markets,” he said at the Gulf petrochemical Association annual meeting in Dubai in November.
“Shale technology has given our industry a tremendous new source of energy and feedstock. But shale is not our industry’s first game-changer and it won’t be the last,” he added.
Major petrochemical companies will always play to their advantages, but those advantages shift position and change over time.
ExxonMobil was not prepared to jump on the shale gas to chemicals bandwagon too soon but has plans to add 1.5m tonnes of ethylene capacity in Baytown coupled to two 650,000 tonne/year PE plants in nearby Mont Belvieu.
The addition of light feedstock cracking capacity in the US, however, is really only layered on the company’s multi-feedstock approach.
“The idea that the shale feedstock advantage will always be so large overlooks the dynamic nature of energy and chemical markets,” Pryor said at the GPCA meeting.
“For chemical companies to maintain a competitive advantage in this ever-changing environment, we must continuously innovate across the value chain – from our raw materials to our finished consumer products.”
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