Petronas to buy out Phillips 66’s interest in Malaysian refinery

Petronas has reached a deal with a subsidiary of Phillips 66 to acquire full ownership of Malaysian Refining Co. Sdn. Bhd. (MRC), which operates of one of two refining trains included in Petronas’ 200,000-b/d refinery complex in Sungai Udang, Melaka state, Malaysia.

Petronas, which already owns 53% of MRC, will pay Phillips 66 Asia Ltd. $635 million in cash, plus an adjustment upon the sale’s completion, for its 47% stake in refinery, Petronas said.

The full acquisition of MRC is intended to enable Petronas to realize greater synergy between its Melaka refining operations as well as strengthen its presence in the company’s refining and trading ventures, said Datuk Wan Zulkiflee Wan Ariffin, Petronas’s chief operating officer and chief executive officer of downstream business.

Alternatively, Phillips 66’s divestiture of MRC will allow the company to redeploy resources to more strategic areas of its business, said Larry Ziemba, Phillips 66’s executive vice-president of refining.

Petronas said it expects to complete the transaction on Dec. 31.

The company’s Melaka refinery complex houses two refining trains, PSR-1 and PSR-2. The first train, PSR-1, is owned and operated by subsidiary Petronas Penapisan (Melaka) Sdn. Bhd. and has a capacity to process 100,000-b/d sweet crude and condensates, according to Petronas’ web site.

The MRC joint venture owns and operates the second train, PSR-2, which has a capacity to process 100,000-b/d of sweet and sour crudes.