Shearman & Sterling advised Malaysian national oil company Petroliam Nasional Berhad (“PETRONAS”) in connection with the completion of an investment by the Saudi Arabian Oil Company (“Saudi Aramco”) in PETRONAS’ Refinery and Petrochemical Integrated Development (“RAPID”) project in Johor State, Malaysia.
On March 28, 2018, PETRONAS and Saudi Aramco achieved completion under two separate share purchase agreements (“SPAs”) in respect of the Saudi Aramco investment. PETRONAS and Saudi Aramco now hold equal ownership in selected ventures and assets of the RAPID project.
The refinery and petrochemical project will be the largest downstream petrochemical project in Asia following completion in 2019. With capacity to refine 300,000 barrels of crude per day, the refinery will produce a wide range of refined petroleum products, including gasoline and diesel which meets Euro 5 fuel specifications, and will produce 3.5 million tons per annum of products. The RAPID project forms part of the larger Pengerang Integrated Petroleum Complex (“PIC”) being developed in the Malaysian state of Johor. The PIC is a 22,000 acre complex which includes a cogeneration plant, an LNG regasification terminal, a raw water supply project, a deep water terminal and centralized and shared utility facilities. Shearman & Sterling’s Project Development & Finance team has been advising PETRONAS on various elements of the RAPID project since 2012, led by Asia Managing Partner Bill McCormack (Singapore-Project Development & Finance).
The Shearman & Sterling team on the investment by Saudi Aramco is led by partner Anthony Patten (Singapore-Project Development & Finance), with significant support from partner Sidharth Bhasin (Singapore-Mergers & Acquisitions), counsel James Clayton-Payne (Singapore-Mergers & Acquisitions) and senior associate Lachlan Clancy (Singapore-Project Development & Finance). This marks the introduction of a strategic long-term partner into the refinery and cracker complex.
The broader team assisting Bill and Anthony on the overall RAPID project includes partners Ben Shorten (Singapore-Project Development & Finance), Iain Elder (London- Project Development & Finance), Daryl Chew (Singapore-International Arbitration), Anna Chung (Singapore-Project Development & Finance) and Dan Feldman (Abu Dhabi-Project Development & Finance); counsel Scott Baggett (Singapore-Project Development & Finance); and associates Matthew Mullarkey, Kyle Koh, Joe Freeman (all Singapore-Project Development & Finance) and Samuel Ogunlaja (Abu Dhabi-Project Development & Finance). As part of completion Shearman & Sterling has advised on the negotiation and execution of over 150 project agreements, including shareholder agreements, long-term crude supply, natural gas supply, utility supply and product offtake, as well as financing arrangements for the project.
Ben Shorten and Bill McCormack led our team on the proposed project financing of the RAPID project.
Morgan Stanley acted as PETRONAS' financial adviser on this transaction.