“This is a significant investment and more details will be announced tomorrow,” Najib said at a brief news conference after hosting a state luncheon for Saudi Arabia’s King Salman and his entourage.
“I just want to confirm that the agreement has been reached and King Salman is satisfied that the deal will be signed tomorrow,” Najib said.
Petronas and Saudi Aramco executives are scheduled to sign the agreement on Tuesday.
An industry source familiar with the matter says Aramco will buy a stake in RAPID’s refinery, cracker and petrochemical operations. Aramco will also supply at least 50 percent of the crude that will be processed at RAPID, with an option to increase the supply, the source said.
The Aramco funding will help move RAPID to fruition and the desire of Saudi and Malaysian leaders to maintain close links between the countries likely helped cement a deal, said Subramanya Bettadapura, an oil and gas analyst with consultants Frost & Sullivan based in Kuala Lumpur.
“This investment confirmation would help bring the RAPID project to the commissioning stage,” said Subramanya. “It’s the goodwill of the Saudi king himself to invest and to maintain good ties with Malaysia, boost bilateral ties.”
The RAPID project, located at Pengerang in Johor, is expected to begin operations in the first quarter of 2019. RAPID will contain a 300,000 barrel-per-day oil refinery and a petrochemical complex with a production capacity of 7.7 million metric tonnes. The complex will sit alongside an existing oil storage site at Pengerang.