Aramco to transfer PRefChem stakes to Malaysia’s Petronas
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DUBAI, May 25 : Saudi state oil giant Aramco will transfer its equity stakes in the PRefChem refining and petrochemical joint ventures in Malaysia to partner Petronas, the two companies said on Monday, ending an eight-year downstream partnership in Southeast Asia.
The deal, subject to closing conditions, will make PRefChem a wholly owned subsidiary of the Malaysian state energy company, the two firms said in a joint statement. Financial terms were not disclosed.
The deal underscores how the Iran war is reshaping energy partnerships across Asia. The effective closure of the Strait of Hormuz since late February has slashed crude flows to the region, forcing refiners to cut runs and triggering shortages of jet fuel, gasoline and diesel, which are products produced by PRefChem.
Full ownership will give Petronas the flexibility to source crude beyond the Gulf and direct output to meet surging regional fuel demand, while Aramco has been forced to cut production due to the conflict. Saudi output fell roughly a third in April from pre-war levels, according to OPEC secondary sources. Aramco had been supplying 50 per cent to 70 per cent of PRefChem's crude feedstock.
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"The transaction was concluded on mutually agreed terms, reflecting the evolving strategic priorities of both parties," they said.
PRefChem comprises two JVs, Pengerang Refining Company and Pengerang Petrochemical Company, which operate an integrated refinery and petrochemical complex within the Pengerang Integrated Complex in the southern Malaysian state of Johor.
The refinery has a capacity of about 300,000 barrels per day and produces fuels including jet fuel, gasoline and diesel, while supplying feedstock to the petrochemical complex, which has a nameplate capacity of about 3.4 million tonnes per year.
Aramco in 2017 agreed to invest $7 billion for equal participation in the project, signing a share purchase agreement during a state visit to Malaysia by King Salman. It was then one of the company's largest downstream investments abroad. The two joint ventures were formally established in March 2018.
The companies said they would keep exploring cooperation including crude supply, technology exchange and product distribution.
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