Petronas Eying South Pars

Malaysia’s state-owned Petronas plans to upgrade its refinery in Kerteh, Terengganu, by 2022 and is looking for new condensate suppliers, including Iran's giant South Pars Gas Field in the Persian Gulf, a company executive said.

"The move comes in line with oil firm's plan to produce higher quality fuels and expand the crude types it processes beyond Tapis, a Malaysian crude oil used as a pricing benchmark in Singapore," Zabidi Ahmad, managing director & CEO of Petronas Penapisan said at a Platts conference this week, Reuters reported.

He added that the production of light sweet Tapis crude, once Malaysia’s flagship grade, is declining, so the Kerteh refinery is looking to switch to other grades such as medium-sweet Kimanis.

“We are looking at processing different condensate, probably Australia’s, North West Shelf or Iran’s South Pars or Qatar’s deodorized field condensate,” he said.

Petronas has already shown interest in working in Iran's oil and gas sector. The company submitted its development proposals for Azadegan Oilfield, the country's largest oilfield located in the southern oil-rich province of Khuzestan in November 2017.

A technical committee from Petronas presented its master development plan to the officials of Iran's Petroleum Engineering and Development Company.

Petronas signed a non-disclosure agreement with PEDEC in December 2016 to study Azadegan Oilfield, which is divided into north and south sections and holds an estimated 33 billion barrels of in-place oil.

"The Kerteh upgrade, which could be completed by 2022, will allow the refinery to produce fuels that meet Euro-5 standard specifications, although the refinery’s capacity will remain unchanged," Ahmad said.

The refinery’s primary units are a crude distillation unit and a condensate splitter.