Aramco to sign chemicals project deal with SABIC

Updated 10 May 2016
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Aramco to sign chemicals project deal with SABIC

DHAHRAN: Saudi Aramco expects soon to sign a memorandum of understanding with Saudi Basic Industries Corp. for a joint oil-to-chemicals project, CEO Amin Nasser said.

SABIC has previously said the proposed project could cost as much as $30 billion, processing petrochemicals directly from crude oil instead of first refining the oil into products such as naphtha.
“It makes absolute sense as Aramco is specialized in oil and refining, and SABIC in petrochemicals,î said one industry source familiar with the project, adding that the scheme could create as many as 100,000 jobs directly and indirectly.
Aramco’s participation could benefit SABIC by giving it better access to funding as well as assistance in marketing products, said Mazen Al-Sudairi, head of research at Al-Istithmar Capital.
“The change in feedstock prices prompted SABIC to change strategy — they want to produce specialty products — and with Aramco possibly joining them as an investor, it will open a big door for them,” he said.
Also Tuesday, CEO Amin Al-Nasser said Saudi Aramco will keep expanding despite low crude prices, its president said on Tuesday.
“Saudi Aramco will continue to expand,” Al-Nasser said during a tour of the company’s headquarters on Saudi Arabia’s Gulf coast in Dhahran, where it drilled its first test well in 1935.
Even though the current situation “is challenging, it is an excellent opportunity for growth,” said Nasser, as the industry worldwide reels from the collapse in oil prices.
Globally, Saudi Aramco is seeking new joint ventures abroad, said the CEO, naming Indonesia, Vietnam, India and China.
Asked to elaborate, he said: “Right now we’re looking at refining, integrated petrochemicals.”
Aramco has meanwhile begun work on a “world class” maritime complex which would conservatively create 80,000 direct and indirect jobs and have a $17-billion impact on gross domestic product.
The complex in Ras Al-Khair would provide engineering, manufacturing and repair services for offshore rigs, commercial vessels and offshore service vessels.
It will be fully operational by 2021, said the CEO.
The company which has its own entrepreneurship center also wants to create 200 small and medium-sized enterprises as part of the Vision 2030.
“This is a very important program,” said the CEO.
“There will be major expansions in all aspects of Saudi Aramco,” he said.


Saudi Aramco to invest in refinery-petrochemical project in east China

Updated 18 October 2018
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Saudi Aramco to invest in refinery-petrochemical project in east China

  • This is the third such project in China that Saudi Aramco has set its sight on
  • Last month, Saudi Aramco signed a long-term deal with the Zhejiang project’s operator Zhejiang Rongsheng to supply crude oil

ZHOUSHAN, China/SINGAPORE: State oil giant Saudi Aramco signed an agreement on Thursday to invest in a refinery-petrochemical project in eastern China, part of its strategy to expand in downstream operations globally.
The memorandum of understanding between the company and Zhejiang province included plans to invest in a new refinery and co-operate in crude oil supply, storage and trading, according to details released by the Zhoushan government after a signing ceremony in the city south of Shanghai.
Zhejiang Petrochemical, 51 percent owned by textile giant Zhejiang Rongsheng Holding Group, is building a 400,000-barrels-per-day refinery and associated petrochemical facilities that was expected to start operations by the end of this year.
This is the third such project in China that Saudi Aramco has set its sight on as it seeks to lock in long-term outlets for its crude oil and produce fuel and petrochemicals to meet rising demand in Asia and cushion the risk of a slowdown in oil consumption.
Last month, Saudi Aramco signed a long-term deal with the Zhejiang project’s operator Zhejiang Rongsheng to supply crude oil.
The oil giant had not yet finalized the size of its stake in the project and still needed to complete due diligence, Aramco’s Senior Vice President of Downstream, Abdulaziz Al-Judaimi, said on the sidelines of the event.
Saudi Aramco expects to supply 170,000 barrels per day of Saudi crude to the refinery in Zhoushan when it starts operations, he said.
The first crude carrier supplying the refinery should arrive in December or January, depending on when the project starts, he added.
Aramco also owns part of the Fujian refinery-petrochemical plant with Sinopec and Exxon Mobil Corp, and has plans to build a 300,000-bpd refinery with China’s Norinco. It is also in talks with PetroChina to invest in a refinery in Yunnan.