Jan 14 2012 |
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Saudi Aramco CEO Says Refining Capacity To Grow To 8M B/D In Decade
Saturday, Jan 14, 2012
DHAHRAN, Saudi Arabia (Dow Jones)--State giant Saudi Arabian Oil Co., or Saudi Aramco , will increase its refining capacity to 8 million barrels per day in the next decade through expansion both at home and abroad, its chief executive Khalid al-Falih said Saturday.
" Saudi Aramco is making a testament to our firm belief that the downstream remains an attractive and profitable business," al-Falih said in a speech at a signing ceremony in the kingdom's oil-rich Eastern Province.
"Over the next decade our total global refining capacity is expected to approach 8 million barrels a day, as a result of the largest expansion today by any oil company in the world," he said.
Saudi Aramco is fully owned by the Kingdom of Saudi Arabia. It is one of the largest oil and gas companies in the world with activities in exploration and production, refining, distribution, shipping and marketing, according to the organization's website.
Al-Falih said the project will cost $8.5 billion if the capital is provided by the two partners. But he said that Aramco and Sinopec may decide to use borrowing to fund the refinery project, in which case total costs could rise to $10 billion.
Sinopec Group will hold a 37.5% stake in the project, known as Yasref, while Saudi Aramco will own 62.5%. The refinery is due to start operations in 2014. Sinopec Group is Asia's biggest oil refiner by capacity.
U.S. oil major ConocoPhillips (COP) last year pulled out of the Yanbu project after deciding to cut back on refining and marketing activities.
The Aramco-Sinopec deal marks the latest effort by China and Saudi Arabia to strengthen energy ties.
Last year, Aramco agreed to an initial deal with PetroChina Co. (PTR) to supply crude oil to a new refinery in southwest China, in a move that will help cement Saudi Arabia's position as China's top crude supplier.
--By Summer Said, Dow Jones Newswires; +966-546-842373; summer.said@dowjones.com
Copyright (c) 2012 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
14-01-12 1708GMT
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