KUALA LUMPUR, June 18 — The US$16 billion (RM66 billion) Refinery and Petrochemical Integrated Development (RAPID) project in Johor is set to begin operations somewhere in the fourth quarter of 2019, Finance Minister Lim Guan Eng said today.
He said the project would turn Malaysia into a net exporter of refined fuels for the first time since 2008.
“This venture marks a historic partnership between two of the most successful national oil companies in the world,” Lim told a 400=strong audience who attended the opening ceremony of the 17th Asian Oil, Gas and Petrochemical Engineering (OGA) exhibition at Kuala Lumpur Convention Centre (KLCC) today.
“In the fourth quarter of 2019, we will witness the full commercial operations of Petronas and Saudi Aramco’s US$16 billion, 300,000 barrel per day RAPID development project.
“RAPID will turn Malaysia into a net exporter of refined fuels for the first time since 2008 and the collaboration brings together vast resources, technologies, experience, expertise and commercial presence much to the benefit of both companies and countries,” he added.
The project is a joint venture between state-owned oil and gas giant Petronas and Saudi Arabia’s national oil company, Saudi Aramco, one of the largest companies in the world by revenue whose 2018 earnings after tax, depreciation and amortization came to USD$224 billion (RM937 billion).
Lim said Malaysia is benefitting from the ongoing trade war between the US and China as investors and businesses find alternative routes, opportunities as well as trade and investment diversion.
He said Malaysia’s strategic location has contributed to its economic growth as we stop relying on oil and gas imports to generate the economy but rather have a diversified portfolio with each industry contributing to the nation’s growth.
“The government is no longer as reliant on petroleum revenue as it was once,” said Lim.
“For instance, in 2009, 41.3 per cent of government revenue came from petroleum sources. In 2019, only an estimated 19.5 per cent of total government revenue came from petroleum sources not counting the special dividend from Petronas used to finance GST (Goods and Services Tax) and income tax refunds.
“Mining contributed to about eight per cent of the GDP (Gross Domestic Product) while manufacturing contributed 22 per cent and services 57 per cent.
“The reorientation of the global supply chain and Malaysia’s competitiveness have resulted in the country’s approved foreign direct investment (FDI) in manufacturing surging 127 per cent to RM20 billion in the first quarter of 2019 compared to RM8.8 billion a year ago.”
Apart from the positive outlook in the oil and gas industry, Lim stressed the need for Malaysia to be at the forefront of the latest technological advances in order to stay competitive and resourceful.
“Whichever industry we are in new technology is fundamentally changing the way we live, work and play.
“An abundance of oil and gas resources alone is no longer a guarantee for long-term economic prosperity. Continuous application of new technology to improve the efficiency and quality is the new norm.
“Industry players have no choice but to constantly innovate and invest in new technology in order to remain competitive globally,” said Lim.
The OGA will be held from June 18 to 20, at KLCC and showcases cutting edge technology and exhibits in the oil and gas industry.
Around 2,000 companies from 60 countries are participating in this year’s event and it’s expected to attract over 23,000 trade and professional visitors.