Aramco, Petronas to finalize RAPID deal after resolving technical issues

Saudi Aramco and Malaysian state energy company Petronas are facing "technical issues" in finalizing the Saudi oil major's $7 billion investment in a refinery project, but the deal will be completed soon, Malaysian state news agency Bernama reported on Friday.

During Saudi King Salman's visit to Malaysia in February, Aramco agreed to buy a $7 billion stake in the Refinery and Petrochemical Integrated Development (RAPID) project in the southern state of Johor, Malaysia. Petronas said then that the deal could take up to a year to close.

"At the moment, there are certain terms that must be fulfilled by both parties and it's an ongoing process. I expect it won't be long for Aramco to release the funds for the project," Abdulrahman Dahlan, a minister in the Malaysian prime minister's office, was quoted as saying.

He did not disclose any details regarding the technical issues.

Last month, Aramco agreed to buy a $900 million stake in petrochemical projects in the RAPID complex, expanding the agreement signed in February.

The companies are also jointly seeking to raise $8 billion via a bridge loan for the RAPID project, Project Finance International reported last week.

RAPID is a $27 billion project located between the Malacca Strait and the South China Sea, conduits for Middle East oil and gas bound for China, Japan, and South Korea.

It will contain a 300,000 barrel-per-day oil refinery and a petrochemical complex with a capacity of 7.7 million tons per year. Refinery operations are set to begin in 2019, with petrochemical operations to follow 6-12 months afterwards.