Saudi Aramco joins with Petronas

DHAHRAN, Saudi Arabia—Saudi Arabian Oil Co. partnered with Petronas Chemicals Group Berhad to enhance the positioning of its petrochemicals projects within the Petronas Pengerang Integrated Complex in the southern Malaysian state of Johor.

Under the venture's share purchase agreement signed between PCG and Saudi Aramco's Aramco Overseas Holding Cooperatif U.A. subsidiary, the parties have equal ownership in PRPC Polymers Sdn. Bhd. within PIC, according to a company statement.

The new agreement was signed by Said Al-Hadrami, vice president of international operations for Saudi Aramco, and Datuk Sazali Hamzah, Petronas vice president and PCG managing director and CEO.

It strengthens Saudi Aramco's position and growth in South East Asia through crude supply and downstream operations, Al-Hadrami said.

"Through this venture, we will also achieve a high degree of integration between refining and petrochemicals, with petrochemicals production greater than 10 percent of crude intake."

The petrochemicals projects in PIC is one of the largest growth projects for PCG and Petronas' largest downstream investment on a single site to date, Hamzah said. As of August 2017, the PIC development is at about 75 percent overall project progress. The first petrochemical production is expected to commence after the completion of the refinery, which is scheduled to be 2019.

"We are putting a lot of effort into PIC readiness," said Hamzah. "By 2020, our petrochemicals projects under PIC will provide a strong foundation for us to move into derivatives and specialty chemicals. Beyond 2020, PCG will also focus on assessing opportunities in downstream derivatives and specialty chemicals at Pengerang, Kertih, Gebeng and East Malaysia."

This agreement comes after the signing of the share purchase agreement with PCG's parent company Petronas in February 2016.