Malaysian Prime Minister Najib Razak said Monday that oil major Saudi Aramco will invest $7 billion in a mammoth oil processing hub in Malaysia, making it the single largest investor in the Southeast Asian country.
The announcement came on the second day of a visit by Saudi King Salman, who is on a multi-nation tour to boost economic ties with Asia.
Najib said Aramco and Malaysia’s national oil company Petronas, which is leading the project, will sign the agreement Tuesday.
“This is a significant investment and more details will be announced tomorrow,” Najib told a news conference after meeting with the king. He said Aramco’s investment is a “strong vote of confidence” in Malaysia’s economy and that bilateral relations are at an “all-time high.”
The Refinery and Petrochemical Integrated Development hub is being developed at a total cost of $27 billion in Malaysia’s southern Johor state bordering Singapore and is due to start operations in 2019. It includes a refinery with the capacity to churn out 300,000 barrels of oil a day and a petrochemical complex with a production capacity of 7.7 million metric tons.
Earlier Monday, Malaysian and Saudi Arabian officials signed several other agreements on trade, human resources and scientific and educational cooperation.
In 2016, bilateral trade rose 28 percent from a year earlier to 14 billion ringgit ($3.2 billion).
King Salman, accompanied by a 600-member entourage, arrived Sunday for a four-day visit, his first to Muslim-majority Malaysia since he took the throne in January 2015. His predecessor, King Abdullah, visited in 2006.
Ties between the two countries came under a spotlight last year when Malaysia’s attorney-general said about $700 million transferred to Najib’s personal bank account in 2013 was a donation from the Saudi royal family and that most of it was returned.
Najib has denied that the money was from the indebted Malaysian state fund 1MDB that he founded. The 1MDB fund, which is at the center of allegations of a vast international scheme of embezzlement and money-laundering, is being investigated by several countries including the U.S., Switzerland and Singapore.
After Malaysia, King Salman is to visit Indonesia, Brunei, Japan, China and the Maldives, the official Saudi Press Agency said. The monarch will also visit Saudi Arabia’s neighbor Jordan before returning home.
Saudi Arabia is the world’s largest oil exporter, with much of its crude destined for customers in Asia.
The kingdom is eager to attract investment as it diversifies its economy, including its upcoming initial public offering of part of state oil giant Saudi Aramco.