Saudi Aramco and Saudi Basic Industries Corporation (SABIC) plan to build a joint refinery in Yanbu that would produce chemical products directly from crude oil
According to a Bloomberg report, the refinery will be built in Yanbu, said industry sources who declined to be identified.
“This move is long overdue given that both companies are operating and competing in the same markets,” said Mohamed Ramady, a London-based energy analyst.
“SABIC and Saudi Aramco cooperation will ensure that both companies will avoid duplication of projects in this period of Saudi economic rationalisation and cost effectiveness,” he added.
Saudi Arabia Deputy Crown Prince Mohammed bin Salman had said last week that a conflict between both companies had been resolved in the past few months and they would have a majority ownership by Saudi Arabia’s sovereign wealth fund — Public Investment Fund.
“Having Saudi Aramco and SABIC working together is needed since both companies will report to the Public Investment Fund and this eventually will create more natural synergies between them,” John Sfakianakis, the director of economic research at Gulf Research Center in Riyadh, noted.
Saudi Aramco and SABIC had been working separately on projects to produce chemicals straight from crude oil without the need to have separate refineries. For now, Saudi Aramco has delayed plans to build an oil refinery with a petrochemical complex in Yanbu with a planned capacity of 400,000 bpd, awaiting progress on studies for the joint refinery with SABIC, sources revealed.
Saudi Aramco CEO Amin Nasser confirmed at a conference in Al-Ahsa on 30 March this year that the company is testing the new technology to produce chemicals from crude oil.
