JEDDAH: Saudi Aramco is planning to raise its domestic refining output capacity to 3.5 million barrels per day (bpd) by 2016 with the start-up of new plants, a top Aramco official announced Monday.
"We can see that total current in-Kingdom refining capacity is 2.26 million bpd. With the addition of the three facilities, the capacity will have increased ... in 2016 to almost 3.5 million bpd," said Mohammed Al-Omair, vice president of refining and natural gas liquids (NGL) fractionation.
Al-Omair also said the additions will come from the three refineries whose development is now under way and which will have a capacity of 400,000 bpd each.
"The first is our joint venture in Jubail with Total (Satorp), it will begin commissioning in 2012. Red Sea refining in Yanbu will begin commissioning in 2014, and Jazan refinery in 2016, while each of the new refineries will be designed keeping petrochemical products such as benzene, xylene and paraxylene in mind. SASREF (Aramco-Shell Jubail refinery) is already producing benzene."
The 550,000 bpd Ras Tanura refinery alone supplies more than 30 percent of the Kingdom's fuel demand. Aramco is upgrading the refinery to produce cleaner fuels as part of a wider plan to meet environmental regulations.
Al-Omair's remarks, published in a Reuters report, came at an industry conference in Manama.
The report said the Kingdom's domestic fuel consumption has been booming on the back of rising population and economic growth. Heavy government subsidies on fuel, making the price at the pump a fraction of what it is in the global markets, has also exacerbated the demand.
Saudi Aramco also considers building three new joint venture refineries in Asia as part of plans to boost its global refining capacity by 50 percent to more than 6 million barrels per day (bpd), the chief executive of Aramco, Khalid Al-Falih, said in April.
Asia is Aramco's largest and fastest growing oil market.
"We continue talks about expansions. I am sure it will yield results, but investments in the international (market) do take a lot of time before we get to see things happening in reality but these are part of the portfolio Saudi Aramco has as plans for the downstream investments," Al-Omair said when asked about an update on investments in Vietnam, Indonesia and another refinery project in China.
Saudi Aramco operates refineries in the US, South Korea, Japan and in China -- the Fujian refining and petrochemical company (FREP).
The firm plans to balance its energy portfolio by increasing exposure to downstream industries in its energy mix, while maximizing its profits from existing oil and gas streams, its chief executive said this month when signing a giant petrochemical joint venture with US Dow Chemical, called Sadara.
"According to a recent study by Morgan Stanley in Europe we see that many premier companies integrate their refining products, one as much as 90 percent. We too, within Aramco, are striving to do the same within the Kingdom," Al-Omair said, citing plans of Rabigh II and the Sadara project.
The report said Saudi Aramco plans to use gas liquid and refined products as feedstock in its new ventures. It is raising gas and NGL output to cater to rising domestic demand for petrochemical feedstock.
© Arab News 2011
