Malaysia's state-owned oil and gas company Petroliam Nasional Bhd., commonly known as Petronas, has announced plans to invest $27 billion in the construction of a new refining and petrochemical complex in the southern state of Johor, close to the border with Singapore.

The decision to proceed with the Pengerang Integrated Complex was approved by Petronas' board of directors, which voted in favor of investing about $16 billion in a refining and petrochemical integrated complex. A further $11 billion will be allocated to the construction of a number of associated facilities, including raw-water supply and power co-generation plants, as well as a liquefied natural gas regasification terminal. The refinery is scheduled to go live in 2019, the company said.

Chief executive officer Shamsul Azhar Abbas stated that before making the final investment decision the company carried out a thorough review on the project, including commissioning an independent assessment by a third party, to make sure the complex would be in line with Petronas' goals for long-term profit and sustainable growth.

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The Pengerang Integrated Complex is part of a wider petroleum complex that the Johor government plans to build, hoping to turn the state into a regional energy hub. However, plans to build facilities at Pengerang have already been dropped by BASF and Kuokuang, a division of Taiwanese state-owned refiner CPC Corp.