An Asian refinery co-owned by Saudi oil giant Aramco has resumed crude processing for the first time since closing after a deadly fire in 2020, sources familiar with the operations told Reuters, in what could be some relief for tight Asian and global markets for refined products.
The Pengerang Refining and Petrochemical complex in Malaysia, capable of processing 300,000 barrels per day (bpd) of crude oil, is owned and operated by PRefChem, a strategic alliance between Malaysia’s national oil company PETRONAS and Saudi Aramco, through an equal partnership in two joint venture companies.
The refinery was closed in March 2020 after a fire killed five people. The closure of the facility coincided with the crash in global fuel demand as countries raced to impose lockdowns due to COVID.
The restart was slated for the fourth quarter of 2021, after one delay due to COVID restrictions. The Q4 2021 restart was further delayed because the operators had the entire plant undergo detailed safety and operational checks.
After the restart, the refinery in Pengerang will initially process crude from storage, before taking in crude from Saudi Aramco.
The complex resumed operations last week, but it will still take some time to return to processing crude to capacity, Reuters’ sources said.
Still, the restart of a refinery would be welcome news for the tight global fuel markets, including in Asia, where countries except for China are easing COVID-related restrictions, including for tourism arrivals.
Earlier this week, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman said that not enough investment in global refining capacity is one of the key drivers of the global rally in gasoline, diesel, and jet fuel prices.
“All mobility fuels have skyrocketed … and the gap between crude prices and these products in some cases is actually 60%,” Prince Abdulaziz bin Salman said at an aviation conference in Riyadh on Monday.
By Charles Kennedy for Oilprice.com
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