Aramco plans cleaner fuels for Ras Tanura, Rabigh refineries

Updated 25 June 2015
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Aramco plans cleaner fuels for Ras Tanura, Rabigh refineries

ALKHOBAR: Saudi Aramco has revived plans to add a clean fuels unit in its biggest oil refinery in Ras Tanura and more environmentally-friendly units to its Rabigh refinery, industry sources said.
There has been a shift in Middle Eastern refineries to produce cleaner fuel to target export markets with stricter environmental requirements.
Early in January, industry sources had told Reuters Aramco suspended plans to develop the $2 billion project in Ras Tanura due to the drop in the oil price.
Aramco's former Chief Executive Officer Khalid Al-Falih, now chairman, had said the company would renegotiate some contracts and postpone some projects due to the price fall.
"Companies expressed their interest for the Ras Tanura project, it is the same design and same scope of work," said one of the sources who declined to be identified.
Saudi Aramco invested $2.5 billion with its partner ExxonMobil to upgrade a refinery on the Red Sea coast of Saudi Arabia to produce cleaner fuels and is also upgrading its Riyadh refinery.
Its new and full-conversion refineries in Yanbu and Jubail also make cleaner fuels.
Bidding for construction in Ras Tanura is due to start in August, the source said, and ends in November with an award expected in March next year. Completion of the plant is due in October 2019.
On the Red Sea coast, Saudi Aramco plans with its partner in Rabigh Sumitomo Chemical in PetroRabigh to build a hydro-desulfurization unit and sulphur recovery unit as well as a new polyols plant which will have a capacity of 220,000 tons per year, industry sources said.
Contracts are likely to be awarded in the first quarter of 2016, one of the sources said.


Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

Updated 23 April 2019
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Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

  • The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios
  • SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year

RIYADH: Saudi Real Estate Refinance Co. (SRC), modelled on US mortgage finance firm Fannie Mae, aims to issue up to 4 billion riyals ($1.07 billion) of long-term sukuk this year, its chief executive said on Tuesday.

The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the Kingdom’s secondary mortgage market.

SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview.

“Our strategy is clearly to tap the market twice this year,” he said. “We are really looking at probably issuing something between ... 2 and 4 billion riyal that we may be issuing in two tranches.

He said SRC was looking at sukuk in the 10 to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said.

He said the company was assessing whether it could also issue bonds in currencies other than the local riyal.

In March, SRC completed a 750 million riyal sukuk issue with multiple tenors, under a program that allows it to issue up to 11 billion riyals of local currency denominated Islamic bonds.

“The rule of the game for us is, like many projects across the Kingdom, attract liquidity from foreign investors,” Susini said.

He said SRC had spent 1.2 billion riyals from its balance sheet buying mortgages from local mortgage financing companies and provided liquidity to these firms.

It has also signed initial accords with several commercial banks to acquire housing mortgage portfolios.

Saudi Arabia’s housing ministry is targeting the mortgage market to reach a total value of 502 billion riyals by 2020 from around 300 billion riyals now.

The government wants to increase activity in the real estate market as it moves to revitalize the economy and is taking steps to reform the sector as part of its 2030 reform plan.

It has been working with developers and local banks to counter a shortage of affordable housing — one of the country’s biggest social and economic problems. Saudi Arabia wants 60 percent of its nationals to own homes by 2020, up from 47 percent in 2016.

The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia compared to 69 percent in the United States, 74 percent in the United Kingdom and 43 pct in Canada, the housing ministry has said.

“The goal of SRC in this market was to make sure that we will be able to refinance at least around 10 percent of the market in 2020, and 20 percent of the market by 2028,” Susini told Reuters.