Saudi Aramco and Petroliam Nasional Bhd (Petronas) will sign a US$7 billion investment agreement tomorrow, said Prime Minister Najib Abdul Razak.

Under the agreement, Saudi Aramco, Saudi Arabia's national petroleum and natural gas company, would develop and manage an oil refinery plant in Pengerang (Johor), under the Refinery and Petrochemical Integrated Development (Rapid) project.

"The decision made this morning between Aramco and Petronas was the most interesting from this visit. A decision was made after discussions between both parties.

"The US$7 billion is a huge and significant investment," Najib told a press conference here today after the signing of a memorandum of understanding (MOU) between Malaysia and Saudi Arabia on economic cooperation.

Details of the MOU will be disclosed tomorrow.

Najib said the decision, made after three weeks of intense negotiations between both parties, was probably the single largest in the project to date.

On the possibility of further economic collaboration, the prime minister said Malaysia was committed to enhancing business and economics ties, including investment and trade with Saudi Arabia.

"Malaysia has good bilateral relations with many countries," he said.

'Selling sovereignty to Saudi Arabia?'

Najib also took a swipe at those who described huge foreign investments flowing into the country as "selling away Malaysia's sovereignty".

"If we go to China, we will be accused of selling our sovereignty. I wonder if they would say we sold our sovereignty to Saudi Arabia when they invest here?

"It's not a question of sovereignty, but about investments which would be good for us. It would bring in foreign capital, strengthen the ringgit in the medium-term. It will also mean more jobs and a strong vote of confidence in our economy," he said.

Earlier, the prime minister held a bilateral meeting with Saudi King Salman Abdulaziz Al Saud, who is on a four-day state visit to Malaysia.

Discussions, among others, centred on several areas of education, security and investment.

Earlier, Najib also witnessed the signing of four other MOUs in economic, education, security and related issues.

"An MOU was signed for economic cooperation and hopefully there would be more projects that we can undertake in Saudi Arabia for example, the Metro Line between Mina and Mudzalifah which is currently operated by Prasarana Malaysia Bhd.

"There is also a possibility of additional (Metro) lines coming up in Riyadh and some other places (in Saudi Arabia)," he said.

Malaysia’s total trade with Saudi Arabia increased 27.8 percent to RM13.99 billion last year from RM10.95 billion in 2015.

Malaysia External Trade Development Corporation (Matrade) statistics showed that Malaysia’s exports to the kingdom declined 1.4 percent to RM3.37 billion (2015: RM3.42 billion) while imports increased 41.1 percent to RM10.62 billion (2015: RM7.53 billion).

- Bernama