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.


Sri Lanka calls for global coalition to tackle rising dollar

Updated 23 October 2018
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Sri Lanka calls for global coalition to tackle rising dollar

  • The island’s currency bottomed out at a record-low 174.12 rupees to the dollar
  • The rupee has shed more than 12 percent of its value this year and Sri Lanka fears it could slide further

COLOMBO: Sri Lanka on Tuesday called for a “coalition of the willing” to help stabilize free-falling emerging market currencies around the globe, as the beleaguered rupee slumped to fresh lows.
The island’s currency bottomed out at a record-low 174.12 rupees to the dollar, resisting a slew of measures by policymakers to arrest its steady decline.
The rupee has shed more than 12 percent of its value this year and Sri Lanka fears it could slide further as US sanctions squeeze Iran, the island’s chief source of oil.
A stronger dollar has made it difficult for emerging markets to repay debts and battered global currencies from Turkey to India and Argentina.
Finance Minister Mangala Samaraweera invited those nations experiencing currency crises to visit Colombo and hash out a strategy.
“The rise of the dollar is having a serious impact on our currencies. We are not the only one affected,” he told reporters in the Sri Lankan capital.
“I want to build a coalition of the willing to deal with this problem. I don’t see the global situation improving any time soon.”
Washington pulled out of a landmark 2015 nuclear deal with Iran in May and has been reimposing punishing sanctions on the Islamic republic, targeting in particular its financial system.
Iran not only supplies Sri Lanka with most of its oil, but is one of its chief buyers of the island’s celebrated tea.
Samaraweera has warned that blockading Iran will have ripple on effects on Sri Lanka, which has been unable to stop the rupee from nose diving.
Last month, Colombo curbed its state institutions and public servants from importing cars to reduce the outflow of foreign capital.
Banks were also ordered to restrict lending for purchasing overseas and consumer goods, but the rupee has continued its decline.
In August, the government substantially increased taxes on small cars to discourage imports, but officials said there was still pressure on foreign exchange reserves to finance big-ticket imports.