Saudi Aramco’s $7 Billion investment in the RAPID Refinery and Petrochemical Project

Shearman & Sterling and White & Case have advised on the deal

On February 28, 2017, PETRONAS and Saudi Aramco signed a share purchase agreement (SPA) in respect of the Saudi Aramco investment. Following completion, PETRONAS and Saudi Aramco will hold equal ownership in selected ventures and assets of the RAPID project. The signing of the SPA took place in Kuala Lumpur and was witnessed by Malaysian Prime Minister Dato’ Sri Najib Tun Abdul Razak and King Salman Bin Abdulaziz Al Saud of Saudi Arabia who was on a visit in Malaysia, as well as the chief executive officers of PETRONAS and Saudi Aramco respectively.

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 tonnes 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 and Finance team has been advising PETRONAS on various elements of the RAPID project since 2012, led by partner Bill McCormack (Singapore-Project Development & Finance).

The Shearman & Sterling team on the investment by Saudi Aramco is led by partner Anthony Patten (Picture) (Singapore-Project Development & Finance), with support from partner Sidharth Bhasin (Singapore-Mergers & Acquisitions) and associates James Clayton-Payne, Matthew Shearman (both Singapore-Mergers & Acquisitions) and Denise Lum (London-Mergers & Acquisitions). This marks the introduction of a strategic long term partner into the refinery and cracker complex.

The broader team assisting Bill and Anthony also includes partners Ben Shorten (Singapore-Project Development & Finance), Iain Elder (London-Project Development & Finance) and Daryl Chew (Singapore-International Arbitration); counsels Scott Baggett, Anna Chung and Alfred Ng (Singapore-Project Development & Finance) and Dan Feldman (Abu Dhabi- Project Development & Finance); associates Chad Passlow, Lachlan Clancy (both Singapore-Project Development & Finance) and Samuel Ogunlaja (Abu Dhabi- Project Development & Finance). Our work includes advising on the complex joint venture and commercial arrangements underpinning the project and Saudi Aramco’s investment in it, including shareholder agreements, long term crude supply, natural gas supply, utility supply and product offtake, as well as financing arrangements for the project.

Morgan Stanley acted as financial adviser to PETRONAS.

White & Case acted as legal adviser to Saudi Aramco. The Saudi Aramco legal team was led by William Montjoy. The White & Case team which advised on the transaction was led by partners Steve Payne (Singapore) and Michael Watson (Abu Dhabi), and included partners Wendell Maddrey, Jean Shimotake (both New York), Luke Robottom (Abu Dhabi), Paul Harrison (Tokyo) and Pontus Lindfelt (Brussels), local partner Jon Bowden (Singapore) and associates Yasuhiro (Taai) Izushima, Yon Tzan Jong, Ee Lynn Tan, Audrey Lim (all Singapore), Yasser Riad, Daniel Solomon, Claire Janvier (all Abu Dhabi), Brandon Freeman (New York), Alex Claydon (Tokyo), Matteo Giangaspero and Sophie Sahlin (both Brussels).

 

Involved fees earner: Steve Payne – White & Case; Michael Watson – White & Case; Paul Harrison – White & Case; Yon Tzan Jong – White & Case; Ee Lynn Tan – White & Case; Audrey Lim – White & Case; Yasser Riad – White & Case; Claire Janvier – White & Case; Alex Claydon – White & Case; Wendell Maddrey – White & Case; Jean Shimotake – White & Case; Brandon Freeman – White & Case; Luke Robottom – White & Case; Daniel Solomon – White & Case; Pontus Lindfelt – White & Case; Matteo Giangaspero – White & Case; Sophie Sahlin – White & Case; Jon Bowden – White & Case; Anthony Patten – Shearman & Sterling; Bill McCormack – Shearman & Sterling; Ben Shorten – Shearman & Sterling; Scott Baggett – Shearman & Sterling; Anna Chung – Shearman & Sterling; Alfred Ng – Shearman & Sterling; Dan Feldman – Shearman & Sterling; Chad Passlow – Shearman & Sterling; Lachlan Clancy – Shearman & Sterling; Samuel Ogunlaja – Shearman & Sterling; Sidharth Bhasin – Shearman & Sterling; James Clayton-Payne – Shearman & Sterling; Matthew Shearman – Shearman & Sterling; Denise Lum – Shearman & Sterling; Daryl Chew – Shearman & Sterling;

Law Firms: White & Case; Shearman & Sterling;

Clients: Petronas; Saudi Aramco;

 

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