Malaysia has let three contracts in a major move to expand its refining and gas liquefaction capacity.
State owned Petroliam Nasional Bhd. (Petronas) let contracts totaling $920 million for a project that will boost the country's refining capacity by 50%. And plans for still more refining capacity are picking up speed, OPEC News Agency (Opecna) reported.
Petronas also hired Foster Wheeler (Malaysia) Sdn. Bhd. as project management consultant for a three train expansion of its LNG plant at Bintulu, Sarawak state.
REFINING PROJECTS
Petronas will build its first major refinery, rated at 100,000 b/d capacity, near the port city of Malacca on the Strait of Malacca.
The state company holds a 1 00% interest in this $2.5 billion sweet crude refinery. It plans a second train for sour crude at Malacca in a joint venture with South Korea's Samsung group and possibly other foreign partners.
In addition, Petronas acquired Taiwan's Chinese Petroleum Corp. (CPC) and Pacific Resources Inc. (PRI) of Hawaii as partners in a proposed 150,000 b/d, $1.2 billion refinery at Bintulu.
CPC and Caltex Petroleum Corp. withdrew from the Malacca sour crude project (OGJ, Sept. 2, Newsletter).
Malaysia's current capacity is 209,500 b/d in four refineries.
The largest is Shell Refining Co. Bhd.'s 90,000 b/d Port Dickson plant.
MALACCA CONTRACTS
Petronas let a $692 million contract to a combine of Japan's JGC Corp. and C. Itoh with Sime Engineering, a Malaysian company, for the Malacca sweet crude plant. The combine will provide basic and detailed design, procurement, construction, commissioning, and initial operation of the plant.
Major components will include 20,000 b/d naphtha hydrotreating and 20,000 b/d catalytic reforming units.
Upon completion in April 1994, the refinery will process local hydrocarbons: Tapis blend crude and Trengganu and Bintulu condensate. Products will include motor gasoline, kerosine, diesel fuel, naphtha, and LPG.
A $228 million contract for construction of a marine terminal went to South Korea's Hyundai Engineering & Construction Co. in a joint venture with Jurutera Konsultant, Ho Hup Construction, and Yasan Melaka Industries, all Malaysian companies.
Plans call for a 1.5 km jetty and seven tanker berths with equipment for surveillance, navigation aid, oil spill control, and metering.
BINTULU PROJECT
CPC and PRI, a unit of Australia's BHP Petroleum Pty. Ltd., each are to hold a 45% interest in the Bintulu refinery, with Petronas owning the remainder.
CPC has asked Malaysia's Industrial Development Authority for permission to invest in the plant, Opecna said. It seeks approval by the end of the year. Opecna pointed out that the Malaysian investment will help CPC secure stable supplies of products to supplement production from its two domestic refineries. Their combined output is 430,000 b/d, about 70,000 b/d shy of demand.
CPC and PRI have been scouting for a refinery site for more than a year, with Singapore and Guam having been considered as favorable locations for the project, Opecna reported.
They chose Bintulu with strong support from Petronas, while land-short Singapore could not offer a large enough site. Guam's restrictions on "certain categories" of ships ruled out that island, Opecna said.
LNG EXPANSION
Petronas' contract award to Foster-Wheeler calls for evaluation of bids for engineering, procurement, and construction of the Bintulu LNG plant project.
Plans call for expansion in three phases during 1995-96, doubling plant production capacity with the addition of 7.5 million tons/year.
Operated by Malaysia LNG Sdn. Bhd., in which Petronas is majority partner, the plant ships LNG to Japan, Korea, and Taiwan. Minority partners are Shell BY, Mitsubishi Corp., and Sarawak's state government. Foster-Wheeler will execute its contract from Bintulu and Kuala Lumpur, Malaysia; Reading, England; and Japan.
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