Saudi Arabian Refineries Company (SARCO) has signed two non-binding memoranda of understanding (MoU) with UK-based green technology company Christof Global Impact to study the development of renewable fuel projects in the Kingdom.

The first MoU aims to study investment in building a refinery to produce biofuel (biodiesel-carbon-negative fuel) derived from algae (carbon-negative algae oil), the company said in a statement to the Saudi Exchange (Tadawul).

The refinery is expected to be built near the Red Sea Coast on an area of 14 million square metres, with a production capacity of 10 million tonnes of biofuels annually.

The first phase investment is valued at up to 1 billion Saudi riyals ($267 million) and will result in annual CO2 savings of about 20 million tonnes when the project phases are completed.

The second MoU plans to study the investment in the technology of slop oil [crude oil mixed with water and solids] to convert waste oil wells, oil from shipping ships, waste of fuel tanks and petroleum materials into low carbon raw materials.

The cost of the first phase of the project is estimated at 130 million riyals ($35 million), which will recycle more than 100,000 tonnes of slop oil and permanently reduce more than 70,000 tonnes of CO2 annually.

Work on the projects will start after obtaining the approval of the Saudi Ministry of Energy and other government approvals, as well as completing the technical and financial studies within 30 days, the statement said.

(Writing by Senthil Palanisamy & D Madhura; Editing by Anoop Menon)