KNM Group Bhd and Zecon Bhd have entered into agreements with Gulf Asian Petroleum Sdn Bhd (GAP) for the efinery/polypropylene and storage projects at Teluk Ramunia, Johor.

"The total value of these two projects are estimated at about US$5.9 billion (RM17.43 billion)," said KNM in a statement today.

It said the heads of agreements involved engineering procurement and construction (EPC) contracts to build 150,000/200,000 bpd petroleum refinery and 400,000/525,000 mtpa polypropylene for GAP, and a petroleum product storage terminal facility comprising four terminals with a total storage capacity of 2.328 million cubic metres.

KNM said it would form a consortium with Zecon Bhd and Korean/Chinese contractors to undertake the EPC of the projects.

The project durations are for 18 and 40 months for the oil terminals and refinery/polypropylene plant respectively.

The project will be funded 30 per cent by equity and the balance through export credit agencies by the EPC consortium and other financial institutions and/or sukuk issuance.

KNM intends to participate in equity of up to 30 per cent in the oil terminal project and potentially with its other consortium members of up to 20 per cent in the refinery/polypropylene plant project.

It said GAP had entered into head of agreements to finalise with leading international crude oil and petroleum products suppliers/offtakers for the supply and offtake agreements.

GAP has also appointed Evercore Partners of New York as its financial advisor. -- Bernama