28 January 2011
Saudi Arabia's downstream development accelerates
Saudi Aramco will make final investment decisions (FID) on $45bn-50bn of refining and petrochemicals projects this year, as the kingdom pushes downstream development in an effort to squeeze more value from its crude
At times of peak electricity consumption, the kingdom has been burning around 0.9m barrels a day (b/d) of raw crude – in the absence of sufficient gas supply – to meet demand (PE 8/10 p32). Investing in domestic refining and petrochemicals capacity will help the Saudis better monetise crude resources, while at the same time producing fuel oil that can be burned to keep the turbines spinning. Electricity demand is rising by around 8% a year. Aramco is looking to bring Chinese state-owned Sinopec in to the 400,000 b/d Yanbu export refinery on the Red Sea. Sinopec would take the 50% dropped by ConocoPhillips when it withdrew from the $10bn project in April 2010. The refinery will use Arab Heavy
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