JEDDAH: The winner of the Jazan oil refinery contract is likely to be announced this month, said Minister of Petroleum and Mineral Resources Ali Al-Naimi on Wednesday.
“We expect an announcement before the end of the year,” said Al-Naimi on the sidelines of a chemical industry gathering in Dubai. Addressing the two-day annual meeting of the Gulf Petrochemicals and Chemicals Associ-ation forum, which was inaugurated in Dubai on Wednesday, Al-Naimi said the Kingdom expects its natural gas reserves to go up and make a significant increase in gas output by 2015.
He also quoted the projection of industry analysts who say that direct investment in the Saudi chemical industry by 2015 will far surpass the $100 billion mark.
The tender for the Jazan refinery project, part of the Jazan Economic City, has been delayed several times. The latest extension of the bidding deadline was in October. The initial plan envisaged bidding in 2007. The refinery will have capacity to process between 250,000 to 400,000 bpd of crude oil. It will be the first Saudi oil refinery to be 100 percent privately owned.
The project is part of the Kingdom’s ambitious plan to overhaul and expand its refining operations at home and abroad.
It envisages domestic refining capacity rising by more than 1.7 million bpd by 2015 from the current 2.1 million bpd. Jazan is far from the Saudi oil fields and on the Gulf coast. The project is part of a wider plan to develop the area bordering Yemen. The Ministry of Petroleum and Mineral Resources said last year that 43 foreign firms and eight Saudi companies, including Saudi Aramco, had been pre-qualified for the tender.
Al-Naimi said Saudi Arabia’s production and reserves of natural gas continue to increase. In 1990, gas reserves were 181 trillion cubic feet (TCF).
In 2008, they were higher at 263 TCF. “We project that in 2010 proven reserves will be still even higher, as Saudi Aramco targets discovering a minimum of 5 TCF of additional nonassociated gas reserves annually,” Al-Naimi said in his speech, the text of which was made available to Arab News.
He also highlighted the change in the ratio of nonassociated to associated gas. “In 1990, 75 percent of our natural gas reserves were in associated gas, whose production can be constrained by the factors of oil production. Today, non-associated gas accounts for 48 percent of total gas reserves, and we expect it to constitute a significantly higher proportion in the future,” he said.
In 1981, Al-Naimi said, Saudi raw gas production was 1,654 million standard cubic feet per day. Today, it is approximately 8,800 million cubic feet with production levels projected to exceed 13,000 million cubic feet by 2020, he added.
Al-Naimi also commended the strong growth registered by the Saudi chemical industry. “During the past 15 years, we have been able to add massive new investments in Hawiyah and Haradh as well as our new gas development at Karan and our new ethane straddle plant.
Besides a record number of wells being drilled by Saudi Aramco directed at new hydrocarbon sources today, we have also opened up exploration for new gas in the southern part of the Kingdom through our foreign partnerships with Shell, Sinopec, Lukoil and ENI,” he said.
Highlighting the achievements of Saudi Arabia in the field of petrochemicals, the minister said the Kingdom today accounted for about 62 percent of chemical production in the Gulf region and approximately 8 percent of global production. “Saudi Arabia is already the world’s largest methanol producer and the second largest ethylene producer,” he said.
In addition to the state-owned SABIC, which continues to grow and prosper as an industry leader, 13 other chemical companies are listed on the Saudi Tadawul Stock Exchange. “From a single petrochemical mega-complex in 1983, the nation now has 24 mega-complexes, 14 of which are international joint ventures and several others are either under construction or planned,” he added.
Al-Naimi also talked of diversifying the chemical industry and sought investments for this. “We will diversify our chemical portfolio into more complex, distinctive products such as specialty chemicals and engineering thermoplastics. Saudi Arabia now actively encourages private investment in the chemical sector in order to strengthen our position as a global chemical leader and to diversify toward value-added specialty chemicals, formulated products and performance polymers,” he said.
