Malaysia’s state-owned oil and gas company Petronas is delaying the start-up of its US$16 billion Rapid refining and petrochemical complex in the southern state of Johor until mid-2019, pushing it back from early that year, its top executive said today.

“For the refinery, the start up will be middle of 2019. That is the current schedule,” president and group chief executive officer Wan Zulkiflee Wan Ariffin said on the sidelines of the Asia Oil and Gas Conference in Kuala Lumpur.

The slide in oil prices over the past year forced Petronas to review and re-bid some of its engineering, procurement and construction contracts (EPC), Wan Zulkiflee said.

Global oil prices have climbed more than 40 percent from six-year lows hit earlier this year to touch 2015 highs in early May. Prices, though, are still well-down from the peaks of June 2014, when growing evidence of a worldwide glut sent crude markets into free fall.

“Commodity prices went down - it was a good time for us to go into the market for EPC contracts. We did some rebidding to get better prices,” he said.

Wan Zulkiflee said the weak oil prices also prompted Petronas to rephase some of its petrochemical projects.

“We’ve taken the decision that some of the chains in the petchem will be rephased. Basically, some of the chains, like the phenolic chains, will come later.”

Located within the Pengerang Integrated Complex in Johor, the US$16 billion refinery and petrochemical integrated development (Rapid) was initially poised to start refinery operations by early 2019.

The project is slated to be Malaysia’s largest liquid-based green-field downstream development. It has been twice delayed due to issues with relocation of residents.

Associated facilities, including a co-generation plant, liquefied natural gas (LNG) re-gasification terminal, air separation unit and raw water supply project within the Pengerang complex, could involve up to US$11 billion in spending.

Rapid will consist of a 300,000-barrels-per-day refinery and petrochemical complex with a combined chemical output capacity of 7.7 million tonnes per year of various products, including differentiated and specialty chemical.

Hit by a slump in global oil prices, Petronas posted a net loss of RM7.3 billion (US$2.03 billion) in October-December 2014, swinging from a profit of RM12.8 billion in the same period in 2013. It was Petronas’ first quarterly loss in at least five years.

- Reuters