Read More: http://www.btimes.com.my/articles/20111223231344/Article/
Kuala Lumpur: Petronas is in talks with several global oil majors including Shell and Exxon Mobil to develop petrochemical plants within its US$20 billion (RM63.4 billion) refinery complex in southern Malaysia, two sources with direct knowledge of the matter said. Malaysia's national oil company is also talking to Japanese firms Itochu Corp and Mitsubishi Corp as well as to Dow Chemical Co and; the largest US chemical maker and as it seeks to tap surging Asian demand and diversify its earnings, the sources said. Petronas is expected to make a decision on the partnerships by mid-2012, which signals it is quickly moving beyond the feasibility stage of the project. "Petronas is getting a lot of interest for the joint-venture undertakings," said one source who declined to be identified as the talks are ongoing. "They have moved to the basic engineering and design stage and after this the tendering process for building the complex will start," the source added. Petronas, Shell and Mitsubishi officials in Malaysia declined to comment. Itochu, Dow Chemical and Exxon Mobil were not immediately available to comment. Petronas first unveiled the Refinery and Petrochemicals Integrated Development (RAPID) project in May and has said the complex will be commissioned by end-2016, which both sources said was on track. The US$20 billion complex is to be built in Johor which borders Singapore and#8211; the largest oil trading hub in Asia. The project is key to Petronas' plan to join the likes of India's Reliance Industries in grabbing a larger share in the US$395 billion (RM1.26 trillion) global market for specialty chemicals and high value raw materials used in products from diapers to higher performance tyres and LCD televisions. "In terms of markets for petrochemicals coming from RAPID, Petronas is aiming for Myanmar, Bangladesh and parts of the subcontinent," said a second source. "The potential is there as these are huge markets or in the case of Myanmar, just opening up." The RAPID project will include a 300,000 barrel-per-day refinery that produces naphtha, gasoline, jet fuel, diesel and fuel oil. The first source said the crude feedstock would come mostly from Petronas' equity projects in Sudan, Chad and eventually Venezuela instead of Malaysia's own higher quality and expensive crude, domestic production of which is slowing. The crude feedstock from Petronas equity projects will also be channeled into the petrochemicals and polymer complex, including a three million tonne-per-year (tpy) naphtha cracker and petrochemical derivatives facility focusing on synthetic rubber. "Over 1 million tonnes will be for ethylene and propylene and the rest for high grade specialty chemicals," said the first source. "Synthetic rubber is a big thing. Nearly 90 per cent of a tyre is made of synthetic rubber because natural rubber production is declining in Asia, so there is an opportunity for Petronas," the source added. The RAPID project gives Petronas' downstream operations a better chance of staying afloat in times of economic downturns and poor margins as it allows Malaysia's only Fortune 500 company to tap into its global feedstock sources, analysts say. Industry players have said Malaysia and Petronas' ramp-up of oil infrastructure in the southernmost tip of the country will create a "Greater Singapore" trading hub that allows the region to keep up with competitors like China. Petronas is counting on interest from Japanese firms which are looking to relocate their plants or re-invest outside their home base after the March tsunami and earthquake triggered uncertainty over future energy supply, the second source said. "The interest has particularly been strong from the usual Japanese players in the petrochemical market. This project has started at the right time," the source added. Reuters
Kuala Lumpur: Petronas is in talks with several global oil majors including Shell and Exxon Mobil to develop petrochemical plants within its US$20 billion (RM63.4 billion) refinery complex in southern Malaysia, two sources with direct knowledge of the matter said. Malaysia's national oil company is also talking to Japanese firms Itochu Corp and Mitsubishi Corp as well as to Dow Chemical Co and; the largest US chemical maker and as it seeks to tap surging Asian demand and diversify its earnings, the sources said. Petronas is expected to make a decision on the partnerships by mid-2012, which signals it is quickly moving beyond the feasibility stage of the project. "Petronas is getting a lot of interest for the joint-venture undertakings," said one source who declined to be identified as the talks are ongoing. "They have moved to the basic engineering and design stage and after this the tendering process for building the complex will start," the source added. Petronas, Shell and Mitsubishi officials in Malaysia declined to comment. Itochu, Dow Chemical and Exxon Mobil were not immediately available to comment. Petronas first unveiled the Refinery and Petrochemicals Integrated Development (RAPID) project in May and has said the complex will be commissioned by end-2016, which both sources said was on track. The US$20 billion complex is to be built in Johor which borders Singapore and#8211; the largest oil trading hub in Asia. The project is key to Petronas' plan to join the likes of India's Reliance Industries in grabbing a larger share in the US$395 billion (RM1.26 trillion) global market for specialty chemicals and high value raw materials used in products from diapers to higher performance tyres and LCD televisions. "In terms of markets for petrochemicals coming from RAPID, Petronas is aiming for Myanmar, Bangladesh and parts of the subcontinent," said a second source. "The potential is there as these are huge markets or in the case of Myanmar, just opening up." The RAPID project will include a 300,000 barrel-per-day refinery that produces naphtha, gasoline, jet fuel, diesel and fuel oil. The first source said the crude feedstock would come mostly from Petronas' equity projects in Sudan, Chad and eventually Venezuela instead of Malaysia's own higher quality and expensive crude, domestic production of which is slowing. The crude feedstock from Petronas equity projects will also be channeled into the petrochemicals and polymer complex, including a three million tonne-per-year (tpy) naphtha cracker and petrochemical derivatives facility focusing on synthetic rubber. "Over 1 million tonnes will be for ethylene and propylene and the rest for high grade specialty chemicals," said the first source. "Synthetic rubber is a big thing. Nearly 90 per cent of a tyre is made of synthetic rubber because natural rubber production is declining in Asia, so there is an opportunity for Petronas," the source added. The RAPID project gives Petronas' downstream operations a better chance of staying afloat in times of economic downturns and poor margins as it allows Malaysia's only Fortune 500 company to tap into its global feedstock sources, analysts say. Industry players have said Malaysia and Petronas' ramp-up of oil infrastructure in the southernmost tip of the country will create a "Greater Singapore" trading hub that allows the region to keep up with competitors like China. Petronas is counting on interest from Japanese firms which are looking to relocate their plants or re-invest outside their home base after the March tsunami and earthquake triggered uncertainty over future energy supply, the second source said. "The interest has particularly been strong from the usual Japanese players in the petrochemical market. This project has started at the right time," the source added. Reuters
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