Background
Petroliam Nasional Bhd, or Petronas as it is better known, the national oil and gas company of Malaysia is all set to invest in a crude oil refinery which will be capable of handling 300,000 barrels of crude a day according to a statement made by the Malaysian Prime Minister, Najib Razak. The plant will also consist of a naphtha cracker and polymers unit. It will be located in the southern state of Johor at Pengerang.
Economic Transformation Program
The recent announcement is in line with what is being called the “Economic Transformation Program” which is a government-led campaign to identify and develop $444 billion in investments from the private sector. This program is an attempt to put Malaysia on a better competitive level with its neighbor, Singapore who possesses a refining capacity 40% more than Malaysia, despite not having its own natural energy resources.
Choice of Location
- Choosing Pengerang was the preferred choice as it has the deepest water in Southeast Asia, up to 26 meters, so that it can use the largest super tankers for transportation of crude.
- By developing this facility, which is expected to exceed the capacity of all the other Malaysian facilities put together, the government expects to convert Johor into an oil and gas zone.
