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As one of the project under the oil, gas and energy NKEA initiative is the Refinery and Petrochemical Integrated Development (RAPID) which is spearhead by Petronas.

RAPID which was announced in 2011 to be build in Pengerang, Johor will comprise a crude oil refinery with a refining capacity of 300,000 barrels-per-day, a naphtha cracker with a combined annual production capacity of approximately three million tonnes of ethylene, propylene, C4 and C5 olefins.

RAPID is built on 2,000-hectare site.  It is an ideal location as it near to the international shipping lanes.

The area also one of the deepest points in Peninsular Malaysia and is well-sheltered.

The refinery would have a capacity of 300,000 barrels per day, producing higher grade fuels that meet European specifications, as well as supplying feedstock to the petrochemical complex for the manufacture of various products, including differentiated and specialty chemicals.

The USD20 billion (RM62.4 billion) project will be commissioned by end 2016.

RAPID is larger than the combined capacity of Petronas’s existing refineries in Melaka and Kertih.

Petronas’s current daily refining capacity in Malaysia is 274,300 bpd, with 74,300 bpd at the Kertih refinery and 200,000 barrels at the Melaka refinery. In Durban, South Africa, Petronas has a refining capacity of 125,000 bpd through its subsidiary Engen[1].

It will be the largest green-field investment in Asia Pacific.

The facility would also have its own regasification plant that will enable it to receive liquefied natural gas (LNG) tankers.

With the commissioning of RAPID in 2016, the retail arm of Petronas, Petronas Dagang can reduce fuel imports.

Petronas Dagang is Malaysia’s biggest retailer of petroleum products with a portfolio that includes gasoline, jet fuel and diesel.

As to date, given the limited refining capacity at Petronas’s local facilities, Petronas Dagang has been importing some of the petroleum products

Petronas management disclosed that continued growth in demand has increased imports to 20% of the 13.54bn sales volume in FY3/11 compared with less than 10% a few years ago.

With the additional refining capacity of 300,000 bpd in Johor, Petronas Dagang may get to lower its imports, which will expand its margins.

Petrol makes up the bulk of Petronas Dagang’s imports beside liquefied petroleum gas (LPG) which is occasionally imported.

Another listed Petronas unit hat stands to benefit from RAPID is Petronas Chemicals.

Petronas Chemicals the leading integrated petrochemical producer in Malaysia and one of the largest in Southeast Asia.

RAPID could help Petronas Chemicals boost its production capacity, which currently stands at over 11m metric tonnes p.a.

Petronas Chemicals has petrochemical complexes in Kertih and Gebeng as well as

manufacturing complexes in Gurun, Bintulu, Labuan and Vung Tau, Vietnam.

Petronas  also recently signed an agreement with German chemical company BASF SE to develop, build and oversee the world-class amenities and chemical plants, which would be set up at the Rapid complex.

RAPID will create thousands of jobs during the peak of its implementation.

According to Datuk Wan Zulkiflee Wan Ariffin, Petronas Chief Operating Officer, in an interview with BERNAMA, RAPID estimated to create 40,000 and 50,000 job opening during the construction the refinery, petrochemical plants and related infrastructure and facilities.

The complex itself would need some 4,000 trained technical staff once it starts to progressively come on stream from end 2016 onwards.

The project is in line with the government’s desire to set up new engines of growth for Malaysia and create new businesses and employment opportunities that will raise incomes and improve the people’s quality of life.

Source : BERNAMA, The Star

-SNASH-(this article written for 1BINA.my)

[1] CIMB Research Report, SECTOR UPDATE ; Oil and GasCashing in on the ETP lock, stock and barrel, 20 July 2011