(EnergyAsia, April 17 2012, Tuesday) — Malaysian state energy firm Petronas said it is making progress in developing an integrated oil refinery-petrochemical project in Pengerang town in the southern Malaysian state of Johor.

The proposed RM60-billion Refinery and Petrochemical Integrated Development (RAPID) complex will include a 300,000 b/d refinery to supply feedstock to an adjoining petrochemical complex as well as produce EU-grade gasoline and diesel when it starts up in late 2016.

Announced by Prime Minister Mohd Najib Tun Abdul Razak last May 13, the project has achieved several important milestones in the past few months.

Petronas said it completed a detailed feasibility study last October, and has begun a front-end engineering design (FEED) study while finalising the selection of potential partners and licensors for the various facilities within the project.

The site topographical survey and soil investigation work have been completed, while the Environmental Impact Assessment Study (EIA) is currently being performed.

Recently, Petronas signed a heads of agreement with Germany’s BASF to jointly own, develop, construct and operate production facilities for specialty chemicals and plants for precursor materials within the RAPID complex. These world-scale facilities will be undertaken on a 40:60 basis.

Progress is also made in the various other technical and commercial aspects of the proposed project for Petronas to reach its final investment decision (FID) in the middle of 2013. Except for pre-FID works, no other contract has been tendered out or awarded.

Petronas said it will begin pre-qualification exercise for various tender packages for the project in stages, the earliest of which is expected to be held in the third quarter of this year.

The company is also working on recruiting qualified and trained personnel to work at the complex’s various plants and facilities.

Petronas said RAPID’s implementation could turn southern Johor into a new refining and petrochemical centre in Malaysia, complementing the existing complexes in the country’s eastern corridors.

It will also create multiple economic spin-offs and a new generation of oil and petrochemical professionals that will drive the development of this sector further, in line with the government’s vision to turn Malaysia into a leading petroleum industry hub in the region.