By Ganesh Sahathevan
Edge Markets has repeorted:
China’s Rongsheng Petrochemical Co Ltd will invest up to RM80 billion for a refining facility in Pengerang, Johor, according to Prime Minister Datuk Seri Anwar Ibrahim.
“The world’s largest petrochemical company Rongsheng has agreed to increase its activities in Malaysia with a petrochemical, oil and gas refining facility in Pengerang, with a project value of up to RM80 billion,” Anwar told the Dewan Rakyat on Tuesday (April 4).
It is not clear how Anwar intends, or expects, the above to alleviate the problems faced by Petronas and its RAPID Refinery in Pengerang. As Prime Minister Anwar has sole and ultimate responsibility for Petronas.
TO BE READ ITH
Saturday, April 1, 2023
Saudi Aramco will invest in refineries in China, and will prioritise supply of oil to China - Deal announced recently might leave Petronas Rapid gasping for oil
by Ganesh Sahathevan
CEO World quoting Saudi Aramco CEO Amin Hassan Naseer reported on 23 March 2023:
Aramco said Monday it has agreed to acquire 10% of Rongsheng Petrochemical Co. Ltd. for $3.6 billion as part of its downstream expansion in China. The deal with Rongsheng sees Aramco supplying 480,000 bpd of petroleum from Saudi to what it said is China’s biggest integrated refining and chemicals plant.
“Among other assets, Rongsheng owns a 51% equity interest in ZPC [Zhejiang Petroleum and Chemical Co. Ltd.], which in turn owns and operates the largest integrated refining and chemicals complex in China with a capacity to process 800,000 bpd of crude oil and to produce 4.2 million metric tons of ethylene per year”, Aramco said in a press release.
The announcement came a day after Saudi Aramco said its joint refining and petrochemical complex in Panjin City, Liaoning Province in northeast China, is due to start construction in the second quarter. Expected to cost over $12 billion, the project includes a refinery that can produce up to 300,000 barrels per day (bpd).
Earlier Aramco said the Huajin Aramco Petrochemical Co. (HAPCO) joint venture, where the Saudi company has 30 percent ownership, will begin construction for the Panjin integrated refinery and petrochemical complex by June.
In 2021 this writer asked where Saudi Aramco's plans to "prioritise energy supply to China" would leave Petronas RAPID in Pengerang with regards Aramco's promise to supply 70% of RAPID's feedstock.
Now, with the commitment to build refineries in China, there will be no need for RAPID's products either. It does appear that RAPID is going be left dry, without supply.
The first signs of trouble emerged in 2017 when Saudi Aramco pulled out of an agreement to invest in RAPID. Saudi Aramco did however agree to supply 50-70% of the project's crude oil feedstock. That did not come as a surprise to this writer, who noted that even at the outset, Aramco never said anything about a cash commitment.
END
Sunday, March 21, 2021
Saudi Aramco to prioritise energy supply to China for half a century- Where does that leave Petronas RAPID at Pengerang?
by Ganesh Sahathevan
Aramco has not said it is investing
Saudi Aramco has announced that it will prioritise energy supply to China for half a century. The guarantee appears to be for a supply of crude, not refined products.
Meanwhile Saudi Aramco has undertaken to meet most of the crude feedstock requirements of the PETRONAS RAPID refinery in Pengerang. That deal has been controversial from the outset (see below); it will be interesting to see if Saudi Aramco remains in a position to fulfil its obligations to RAPID.
Sunday, March 26, 2017
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
The RAPID refinery is meant to be a very modern refinery capable of turning virtually any crude oil into high end products (the technical term is high complexity).
Modern refineries are not supposed to rely on any particular crude for it makes them beholden to a particular supplier or suppliers; but here we have Petronas executive VP Md Arif Mahmood (photo above) insisting :
"This refinery (Rapid) needs a specific type of crude oil that will allow us to make the necessary cut to supply to the petrochemical plants".
END
Petronas defends RM31b joint venture with Saudi Aramco
In the wake of concerns raised over alleged attempts to sabotage the nation's economy, Petronas has defended its decision to pursue a RM31 billion deal with Saudi Aramco for the Refinery and Petrochemical Integrated Development (Rapid) in Pengerang, Johor.
English-daily The Malay Mail quoted Petronas group executive vice-president Md Arif Mahmood as saying that it was "never forced into the joint venture" and had always been eyeing a partner like Aramco.
"How can we be forced to do this deal? We were looking for a partner that would complement the project.
"We are not selling Rapid as reported. It’s a 50-50 partnership," Md Arif is reported as saying in an interview.
The Rapid project is part of Petronas’ Pengerang Integrated Complex (PIC), estimated to cost as much as US$27 billion.
"We are looking for partners to invest and co-invest. And selling and co-investing are very different," he pointed out.
Md Arif also said not many people were aware that discussions between Petronas and Aramco have been ongoing since 2014.
"The discussions with the Saudis took more than two-and-a-half years. They looked at the due diligence of the investment opportunities.
"It is not like it is only yesterday we decided to partner Aramco," he said in describing the partnership as being "an obvious and perfect" one.
The deal signing was formally witnessed by Prime Minister Najib Abdul Razak and Saudi King Salman on Feb 28 as part of the king's agenda while on a state visit to Malaysia.
Md Arif dismissed as "not credible" reports that said senior Petronas officials were against the joint-venture with Aramco and had to be forced into it.
"I am going to make this very clear. It had to be within the terms agreeable, not only for us but agreeable to both parties before we could actually get to the stage where we are now," he stressed.
Among others, Md Arif said, Rapid would be supplying at least 50 percent of the 300,000 barrels of crude oil to be refined a day at its facilities.
On reasons for partnering with Aramco, he said Petronas needed a partner that would be able to leverage its strength and manage the risks at the same time.
"Why Aramco? It is the biggest crude supplier in the world with a supply capacity of 10 million barrels a day," he said.
"This refinery (Rapid) needs a specific type of crude oil that will allow us to make the necessary cut to supply to the petrochemical plants.
"To have a crude supplier as a partner, for long-term crude security, that itself is a good reason why Aramco," Md Arif added.
Najib last week accused a former leader of spreading lies about Malaysia, which he said had nearly scuttled the deal between Petronas and Saudi Aramco.
In the veiled attack apparently aimed at Parti Pribumi Bersatu Malaysia chairperson Dr Mahathir Mohamad, Najib lamented that the opposition would rather create false propaganda than to engage on facts.
END
References
Crude oils have different quality characteristics
Notes: Points on the graph are labeled by country and benchmark name and are color coded to correspond with regions in the map below. The graph does not indicate price or volume output values. United States-Mars is an offshore drilling site in the Gulf of Mexico. WTI = West Texas Intermediate; LLS = Louisiana Light Sweet; FSU = Former Soviet Union; UAE = United Arab Emirates.
References-Wikipedia
Jump up^ "Nelson Complexity Index" (PDF). pakpas.org. Retrieved 3 November 2016.
Jump up^ "Nelson Index". investopedia.com. Investopedia. Retrieved 3 November 2016.
Jump up^ David C. Johnston; Daniel Johnston (2006). Introduction to Oil Company Financial Analysis. PennWell Books. p. 199. ISBN 9781593700447. Retrieved 3 November 2016.
Jump up^ Johnston, Daniel (March 18, 1996). "Refining Report Complexity index indicates refinery capability, value". ogj.com. Oil and Gas Journal. Retrieved 3 November 2016.
Jump up^ "PMI-Oman 2014". pmioman14.wordpress.com. Retrieved 3 November 2016.
Jump up^ Nelson's Complexity Factor (PDF), Reliance Industries Ltd, retrieved 2009-02-28
