MOSCOW (MRC) -- Saudi Aramco plans to boost investments in refining and petrochemicals to secure new markets for its crude and sees growth in chemicals as central to its downstream strategy to lessen the risk of a slowdown in oil demand, as per Reuters.
Aramco, the world’s biggest oil producer, is expanding its footprint globally by signing downstream deals and boosting the capacity of its plants, ahead of an initial public offering next year - the largest IPO in history.
The state oil giant is moving ahead with multi-billion-dollar projects in China, India, and Malaysia and aims to finalize new partnerships this year, Abdulaziz al-Judaimi, Aramco’s senior vice president for downstream, told Reuters.
Aramco plans to raise its refining capacity to between 8 million and 10 million barrels per day, from some 5 million bpd now, and double its petrochemicals production by 2030, he added. Aramco pumps around 10 million bpd of crude oil.
“Our strategy is very simple. We want to be at 8 to 10 million barrels per day of participated (refining) capacity ... (and) we are going forward by trying to be a top leader in chemicals by 2040,” Judaimi said.
To help it reach these targets, Aramco has entered a 50 percent joint venture with three Indian refiners to build a USD44 billion, 1.2-million-bpd refinery integrated with petrochemical facilities on India’s west coast.
Aramco has said it may introduce a strategic partner to share its 50 percent stake in the Indian refining venture.
Judaimi said Aramco was working with Abu Dhabi National Oil Co (ADNOC) toward securing a partnership. It would be the first time for the two national oil companies to join hands in an international venture.
Apart from India, Aramco is also taking a 50 percent stake in Petronas’ huge RAPID project in the southern Malaysian state of Johor.
Aramco hopes this will help it dominate supplies in India and Malaysia, two of the world’s fastest-growing oil markets after China, and where growth potential is bigger than in other, more developed regions. Aramco is eyeing three separate refining and petrochemical projects in China, Judaimi said.
In April, Aramco said it was integrating a petrochemicals business into its subsidiary Motiva, the United States’ biggest oil refinery.
Aramco is strengthening its refining role in China, one of its biggest customers. It has a refinery joint venture with Sinopec and Exxon Mobil and is in talks with CNPC to finalize the purchase of a stake in a 260 Mbpd refinery in Yunnan. Judaimi said he expects to take a final investment decision on the Yunnan refinery, which is operational, by the end of this year.
Aramco plans to build a 300 Mbpd refinery with China’s Norinco. Judaimi said he expects to finish front-end engineering for the Norinco project by mid-2019, following which the company will take its final investment decision. Judaimi said Aramco had also started negotiations for a third refinery in China.
MRC