MOSCOW (MRC) -- The commissioning of Malaysia's Pengerang Refining and Petrochemical integrated refinery and petrochemicals complex, also known as PRefChem, will be delayed until the second half of 2020 from the date of end-2019, due to the fire at some units in April 2019, reported S&P Global with reference to Saudi Aramco's statement in its IPO prospectus published recently.
Any delay would hold back some crude and product trade flows that were expected on the startup of PRefChem, in which Malaysia's state-run Petronas and Saudi Aramco own a 50% stake each.
Petronas had said in September the Pengerang Integrated Complex, where PRefChem is located, was on track to achieve commercial operations in the fourth quarter of 2019, with overall progress of 99.7% as of 30 June 2019.
Saudi Aramco had a gross refining capacity of 4.9 million b/d as of 31 December 2018. It said it expects capacity additions from its purchase of a 17% interest in Hyundai Oilbank, the Jazan integrated petrochemical refinery and PRefChem to increase its gross refining capacity to 6.8 million b/d by the end of 2020.
The PRefChem joint ventures, Pengerang Petrochemical Co and Pengerang Refining Co, together include a 300,000 b/d refinery, an integrated steam cracker with a capacity of 1.3 million mt of ethylene, with associated propylene, butadiene, benzene, polyolefins and ethylene glycol facilities.
Saudi Aramco expects these facilities to be commissioned in the second half of 2020 and will provide a significant portion of PRefChem's crude supply under a long-term supply agreement, giving it an expansion opportunity in Southeast Asia and new geographies for its crude oil production, the document said.
PRefChem, located in Malaysia's southern state of Johor, adjacent to the regional trading hub of Singapore, will be supported by a deep-water oil terminal, an LNG regasification plant, crude and LNG storage and a cogeneration power plant.
It will produce Euro 5 gasoline and diesel and other refined products as well as feedstock for the production of three million mt/year of petrochemical products.
Saudi Aramco will provide long-term placement of 150,000 b/d of crude to PRefChem, with an option for an additional 60,000 b/d and have offtake rights for 50% of production, including gasoline, diesel, kerosene, olefins, polymers and glycol.
Additionally, Aramco said it has signed a non-binding letter of intent with Reliance Industries on 12 August 2019 to purchase a 20% stake in the Indian refining major's oil to chemicals division.
The document also said the Jazan refinery is expected to begin operations at the end of 2019 and is expected to be ready for full operations in the second half of 2020. Jazan has a capacity of 400,000 b/d.
As MRC informed before, PrefChem received commerical ethylene and propylene at its new cracker in Pengerang on 13 September, 2019.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
PrefChem a joint venture between Malaysia's Petroliam Nasional Bhd, or Petronas, and Saudi Aramco. The Pengerang Refining development, part of Petronas’ USD27 billion Pengerang Integrated Complex, consists of a 300,000 barrels-per-day (bpd) oil refinery and a petrochemical complex with a production capacity of 7.7 million tonnes per year in the southern Malaysian state of Johor.
Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.