Mon | Aug 21, 2017

Saudi Aramco to invest US$7b in oil hub

Published:Tuesday | February 28, 2017 | 2:00 AM
Saudi Arabia’s King Salman (left) listens to Malaysian Prime Minister Najib Razak during an MOU signing ceremony in Putrajaya, Malaysia, Monday, February 27, 2017.

Malaysian Prime Minister Najib Razak said on Monday that oil major Saudi Aramco will invest US$7 billion in a mammoth oil-processing hub in Malaysia, making it the single largest investor in the Southeast Asian country.

The announcement came on the second day of a visit by Saudi King Salman, who is on a multi-nation tour to boost economic ties with Asia.

Najib said that Aramco and Malaysia's national oil company Petronas, which is leading the project, will sign the agreement on Tuesday.

"This is a significant investment and more details will be announced tomorrow," Najib told a news conference after meeting with the king. He said that Aramco's investment is a "strong vote of confidence" in Malaysia's economy and that bilateral relations are at an "all-time high".

The Refinery and Petro-chemical Integrated Develop-ment hub is being developed at a total cost of US$27 billion in Malaysia's southern Johor state bordering Singapore and is due to start operations in 2019. It includes a refinery with the capacity to churn out 300,000 barrels of oil a day and a petrochemical complex with a production capacity of 7.7 million metric tons.

Earlier on Monday, Malaysian and Saudi Arabian officials signed several other agreements on trade, human resources, and scientific and educational cooperation.

In 2016, bilateral trade rose 28 per cent from a year earlier to 14 billion ringgit (US$3.2 billion).

 

Official visit

 

King Salman, accompanied by a 600-member entourage, arrived on Sunday for a four-day visit, his first to Muslim-majority Malaysia since he took the throne in January 2015. His predecessor, King Abdullah, visited in 2006.

Ties between the two countries came under a spotlight last year when Malaysia's attorney-general said that about US$700 million transferred to Najib's personal bank account in 2013 was a donation from the Saudi royal family and that most of it was returned.

Najib has denied that the money was from the indebted Malaysian state fund 1MDB that he founded. The 1MDB fund, which is at the centre

of allegations of a vast international scheme of embezzlement and money-laundering, is being investigated by several countries including the US, Switzerland, and Singapore.

After Malaysia, King Salman is to visit Indonesia, Brunei, Japan, China, and the Maldives, the official Saudi Press Agency said. The monarch will also visit Saudi Arabia's neighbour Jordan before returning home.

Saudi Arabia is the world's largest oil exporter, with much of its crude destined for customers in Asia.

The kingdom is eager to attract investment as it diversifies its economy, including its upcoming initial public offering of part of state oil giant Saudi Aramco.

- AP