Singapore — The start-up of the 300,000 b/d Refinery and Petrochemical Integrated Development, or RAPID, project in Malaysia will boost Asia's refining capacity growth in 2019, increase Saudi crude inflows to the region and add to the supply of refined petroleum products.
아직 가입하지 않으셨나요?
일일 이메일 알림과 구독자 노트를 받고 이용 경험을 내게 맞게 설정하세요.지금 가입하세요
The RAPID facility, operated by Pengerang Refining and Petrochemical or PRefChem, a joint venture between state-run Petronas and Saudi Aramco, is among the largest greenfield oil refineries to start operations in Southeast Asia in recent years, supplementing the existing refining hub in adjacent Singapore.
It underscores the shift of global refining capacity growth to Asia where the bulk of demand growth is concentrated, driven by transportation fuels and petrochemicals, and amid tightening fuel regulations ranging from tailpipe emissions to marine fuel caps.
The refinery, located in the Pengerang Integrated Complex in the southern Malaysian state of Johor, has fired up its crude distillation unit and is expected to be ready for commercial operations by the fourth quarter of 2019, PRefChem said in a statement late Tuesday.
It said the refinery will produce refined products including gasoline and diesel that meet Euro 5 fuel specifications, and provide feedstock for the integrated petrochemicals complex with a capacity of 3.3 million mt/year.
"Today, the refinery has achieved mechanical completion and is now in full commission, marking the beginning of start-ups in subsequent facilities within this integrated development," PRefChem's chief executive Colin Wong Hee Huing said.
ASIAN REFINING SURGE
Global refiners will add 1.87 million b/d of CDU capacity in 2019, and the Asia-Pacific region will account for 61% of those additions, taking total Asian CDU capacity to over 37 million b/d by the end of 2019, according to S&P Global Platts Analytics.
"As a result, Asia's share of global CDU capacity is expected to rise to 37% in 2019," Platts Analytics said in its latest Asia-Pacific Oil Market Forecast report.
While China continues to dominate Asian refining capacity growth, Southeast Asian capacity additions this year are significant, mainly from Malaysia's RAPID complex and Brunei's Hengyi refinery in the second half of 2019 with a capacity of 160,000 b/d.
The RAPID refinery is designed to meet both domestic fuel demand in Malaysia and export surplus volumes, although for now, domestic fuel demand is likely to be affected by lukewarm economic growth.
Nomura economists said earlier this month that they had a cautious view on the Malaysian economy as post-election reforms have yet to show results. They expected Malaysia's 2019 GDP growth to be 4.0%, a decline from 4.7% in 2018, and below the consensus forecasts of around 4.6%.
This is largely due to a weak export sector as the Malaysian economy is highly trade dependent and exposed to any protracted slowdown in global trade, especially with its presence in the global supply chain networks, Nomura said.
Asia petrochemical outlook H1 2019
With a surge in new production capacities across China, the US-China trade tensions, and volatile upstream markets, 2019 is set to be full of challenges for those in the petrochemicals space. This report looks at the key themes expected to shape key Asian petrochemical markets.Download the report
REFINED PRODUCT AND CRUDE FLOWS
RAPID will add to refined product supply at a time when higher Chinese exports will add to Asia's diesel surplus and pressure refinery margins, at least until the impact of the IMO 2020 regulations start to tighten the market.
"Asian refining margins are expected to average $4.40/b in 2019, up from $3.30/b in 2018," according to Platts Analytics, which expects Asian product markets to tighten in the second quarter due to heavier refinery turnarounds
RAPID is also key to Saudi Aramco's marketing strategy, as it will supply half the refinery's crude feedstock, with the option of increasing it to 70%, while Petronas will supply the natural gas, power and other utilities needed to run the plant.
Aramco has been chasing markets in the east as key consumers like the US have boosted domestic production. Taking an equity stake or joint partnership in an oil refinery is a favoured strategy to secure captive demand.
Just last week, Saudi Arabia discussed building a new oil refinery and petrochemical plant in South Africa as part of its $10-billion investment in the country. Before that it was in talks with Pakistan for a 200,000-300,000 b/d oil refinery project and in 2018 Aramco agreed to invest in a $44-billion refinery and petrochemicals complex in India.
--Eric Yep, email@example.com
--Edited by Elizabeth Thang, firstname.lastname@example.org