Merapoh to build RM36bil oil refinery in Kedah
oil refinery
Country’s biggest such facility to take shape in Yan by 2014
KUALA LUMPUR: Merapoh Resources Corp Sdn Bhd aims to complete the building of a US$10bil (RM35.7bil) oil refinery in Yan, Kedah, which will be the biggest in the country, by 2013 or early 2014, said executive chairman Md Nazri Ramli.
“We have appointed South Korea’s SK Group, which owns one of the world’s largest oil refineries and the third largest industrial group in South Korea, to do the engineering and construction of the project and the maintenance of the refinery,” he said at an agreement signing ceremony for the project here yesterday.
“Under the project, Merapoh will import crude oil from the Middle East, most probably from Saudi Arabia, process the crude into refined products and export them to China and other Asian nations,” he said.
The plant would produce naphtha, gasoline, kerosene, jet fuel, diesel and liquefied petroleum gas, the company said
Md Nazri Ramli (left) exchanging documents with SK Engineering and Construction Ltd of South Korea vice-chairman and CEO Suk Kyong Yoon. With them are Kedah state government secretary-general Datuk Wira Rasli Nasir (left) and Kedah Chief Minister Datuk Seri Azizan Abdul Razak
Nazri said Merapoh had secured the US$10bil investment from two international investors for the refinery, which can produce 350,000 barrels per day when completed.
“Hong Kong Beijing Star Ltd and Winston Investment Ltd will each invest US$5bil and have 40% stake in this project. We will hold the remaining 20%,” he said.
Upon completion of the project, the two investors will find buyers for 150,000 barrels a day of the refinery’s output while China National Petroleum Co (CNPC) will buy the remaining 200,000 barrels a day for 20 years, according to Merapoh.
Meanwhile, Bloomberg quoted Hong Kong Beijing Star president Li Feng Yi as saying the company would like to sell its stake to CNPC once the refinery was completed.
Merapoh hopes to perform the groundbreaking ceremony for the project next month which involves 850 acres of reclaimed land and another 100 acres on the mainland.
Merapoh said it would award 30% of the project’s contracts to domestic contractors, in compliance with Government regulation.
Malaysia’s biggest oil refinery is set to employ 500 engineers and professionals as well as 1,000 other employees when it takes off.
In another development, Kedah Mentri Besar Datuk Seri Azizan Abdul Razak said the proposed US$7bil 300km oil pipeline project from Yan, Kedah to Bachok, Kelantan, was under review but didn’t give the reason for the review.
The project was announced in 2007 by Trans Peninsula Petroleum Sdn Bhd.
-- the star online.