RAPID speeds up Johor's rise as major petroleum trade hub

Johor is tailor-made for petroleum trade. Located at the southern tip of Malaysia, bordering Singapore, its proximity to key regional oil centres and international shipping lines gives it a strategic advantage.

State-owned PETRONAS is leading the Refinery and Petrochemical Integrated Development (RAPID) project which is perfectly placed in Pengerang, Johor. The project will enable Malaysia to meet the growing regional demand for fuel and specialty petrochemicals by 2016.

A crude oil refinery with a refining capacity of 300,000 barrels per day forms the backbone of RAPID. The refinery produces gasoline and diesel compliant with European specifications and feedstock for 22 smaller petrochemical complexes at the site. Projected to produce 4.5 million tonnes of petrochemicals and downstream products per year, RAPID also features a naphtha cracker with an annual capacity of 3 million tonnes.

As Asia-Pacific's largest greenfield development, RAPID has attracted large foreign investments. German chemical company BASF shook hands with PETRONAS to develop and run plants at the site. Similar arrangements have been undertaken with Versalis of Italy, ITOCHU of Japan and PTT Global Chemical of Thailand for various high value-added downstream chemicals plant and product developments.

With potential partners and licensors for RAPID's other facilities lining up, PETRONAS will hold

pre-qualification exercises for tender packages in the third quarter. It is scheduled to reach its final investment decision in the middle of next year.

A project of this magnitude will also have a large impact on the people of Johor. Malaysian Prime Minister Najib Razak says RAPID will infuse HK$292.29 billion in investments into Johor over the next six years. "The first phase of the PETRONAS project needs about 40,000 contract workers," Najib says.

RAPID's opportunities for Johor will also open doors for overseas oil companies interested in Southeast Asia. "This will strengthen Johor's role as a premier centre for oil, gas and petrochemical industries in Asia and the rest of the world," Najib says.