Saudi Aramco takes step to integrating petrochems into United States’ biggest refinery

A Saudi Aramco employee sits in the area of its stand at the Middle East Petrotech 2016, an exhibition and conference for the refining and petrochemical industries, in Manama, Bahrain, September 27, 2016. (Reuters)
Updated 08 April 2018
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Saudi Aramco takes step to integrating petrochems into United States’ biggest refinery

HOUSTON: Saudi Aramco took the first steps to integrating a petrochemicals business into the United States’ biggest oil refinery, which is operated by its subsidiary Motiva Enterprises.
Aramco’s Chief Executive Amin Nasser signed memoranda of understanding (MoUs) worth $8 billion-$10 billion with Honeywell UOP and Technip FMC to study petrochemical production technology for use in a chemical plant the company is considering building at the Port Arthur refinery.
Saudi Arabia’s Crown Prince Mohammed bin Salman, who was winding up a two-week visit to the United States, was present at the signing in Houston, Texas, on Saturday along with Saudi Energy Minister Khalid Al-Falih and US Energy Secretary Rick Perry.
“These agreements signal our plans for expansion into petrochemicals,” Motiva’s Chief Executive Brian Coffman said.
Aramco, which wants to develop its downstream business as the government prepares to sell up to 5 percent of the world’s largest oil firm in an initial public offering (IPO) this year, wants to use oil as a major petrochemicals feedstock.
Coffman also said Motiva was evaluating boosting the 603,000 barrel-per-day (bpd) Port Arthur refinery’s capacity to 1 million or 1.5 million bpd, which would make it the largest in the world.
 
The aromatics unit for which Honeywell UOP’s technology is being considered under one of the MoUs, would convert benzene and paraxylene, byproducts of gasoline production, into 2 million tons annually of feedstocks for chemicals and plastics.
The other MoU would allow Aramco to use Technip FMC’s mixed-feed ethylene production technologies in the United States. The technology would produce 2 million tons a year of ethylene, which is used to make plastics, Motiva said.
The final investment decision on setting up a multi-billion-dollar petrochemical plant at Port Arthur is not expected until 2019, and is “dependent on strong economics, competitive incentives, and regulatory support,” Aramco said in a statement.
Coffman did not provide a timeline for the possible expansion of the Port Arthur refinery’s crude oil processing capacity.
“That’s something we’re evaluating, we’re studying for in the future,” he said.
The 1.2-million bpd Reliance Industries refinery in Jamnagar, India, has the world’s largest crude oil processing capacity.
Aramco said last year that it would invest $18 billion in Motiva to expand the refinery and move into petrochemical production.
Other US companies, including Chevron Phillips Chemical Co. — a joint venture of Chevron Corp. and Phillips 66 — and Exxon Mobil Corp, have recently opened plants, like the one Motiva is considering, to process ethane into ethylene.
Chevron Phillips is considering building a second ethane cracker on the Gulf Coast of Texas.
The price tag for a large ethane cracker is typically over $6 billion, according to analysts. In addition to taking refining byproducts, ethane crackers provide hydrogen for refineries to use in making motor fuels.

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Motiva

Aramco-subsidiary Motiva is evaluating raising the Port Arthur refinery's capacity to up to 1.5 million bpd, which would make it the largest in the world.


Abu Dhabi, Shanghai plan exchange focusing on China trade

Updated 24 April 2018
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Abu Dhabi, Shanghai plan exchange focusing on China trade

DUBAI: The emirate’s international financial center, has agreed in principle with the Shanghai Stock Exchange to cooperate in establishing an exchange focusing on China’s foreign trade and investment, ADGM said on Monday.
The partners signed a memorandum of understanding to develop the exchange in Abu Dhabi. It would cater to companies and investors involved in China’s Belt and Road initiative, a Beijing-backed drive to win trade and investment deals along routes linking China to Europe.
“At ADGM, we have the international platform to serve different kinds of enterprises and investors — global, regional and local — seeking exposure to the Middle East and North Africa and Belt and Road projects,” said Richard Teng, chief executive of ADGM’s Financial Services Regulatory Authority.
Teng said he could not give specifics of which instruments the new exchange would trade or when it might open, saying this would depend on demand among stakeholders in both ADGM and Shanghai.
Chinese financial institutions have approached ADGM to discuss the financial environment in Abu Dhabi and their development needs in the six-nation Gulf Cooperation Council (GCC), he added.
Trade and investment ties between China and the GCC have been growing rapidly. The region is a big oil supplier to China, and Sino-United Arab Emirates trade exceeded $46 billion in 2016, according to Beijing’s official Xinhua news agency.
Ultimately, the new exchange will support not only the Belt and Road initiative but also the internationalization of the Chinese yuan in the region, Teng said.
Abu Dhabi is trying to build up ADGM, which opened in October 2015 and is smaller than the international financial center in neighboring Dubai, as part of a drive to develop its economy beyond oil exports.