State-owned energy giant Petronas said today it will construct a RM60 billion ($20 billion) integrated refinery and petrochemicals complex in southern Malaysia near the border with Singapore.

The Refinery and Petrochemicals Integrated Development (RAPID) will be commissioned by the end of 2016 as Malaysia aims to become a world class integrated oil, gas and petrochemical trading hub.

Petronas said the new complex, to be built on 2,500 acres (1,012 hectares) of coastal land in Johor, will expand its petrochemicals business and further spur the growth of Malaysia's oil and gas downstream sector.

NONE "Looking ahead, RAPID is expected to attract significant investments from international companies within and further down the business value chain," Petronas president and chief executive officer Shamsul Azhar Abbas said.

Shamsul said the project will comprise a crude oil refinery, a naphtha cracker and a petrochemicals and polymer complex.

"In terms of its contributions to nation-building, our downstream activities have helped to broaden and diversify the country's industrial base (and) strengthen the capacity to meet domestic fuel requirements indigenously, which has enhanced the country's security of energy supply," he said.

Petronas said the crude oil refinery will be able to produce 300,000 barrels per day of gasoline, jet fuel, diesel and fuel oil.

Malaysia is Southeast Asia's second-biggest oil producer after Indonesia.

The site in Pengerang was picked because of its strategic location near international shipping lanes and deepwater port facilities.

"Its close proximity to regional demand centres is also expected to attract potential collaborations with global partners in logistics and product distribution," the oil firm said.

Singapore seen as key partner

The RAPID project is currently at the detailed feasibility study stage and a final decision will be made in 2012.

Shamsul said Petronas aims to partner major international petrochemical players including those from Singapore on an equity basis to produce premium speciality chemicals, demand for which is growing in the Asia Pacific region.

"We can do business integration with Singapore. Our door is open to Singapore businesses. Let's not view Singapore as a competitor," he said.

Although Singapore does not have its own natural energy resources it has a larger refining capacity than Malaysia.

Petronas also said it would build a new liquefied natural gas receiving and re-gasification terminal within the RAPID facility to support the development of RAPID.

- AFP