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Saudi Aramco and its petrochemicals subsidiary Sabic have reportedly canceled plans for a 400k bbl / d refinery and chemical facility in the Eastern Province’s Ras Al Khair, while also scrapping proposals to move the project to Jubail, Bloomberg reports, citing unnamed sources. Three more planned chemical facilities in Jubail and Yanbu are also under review and may also see cancellations, the sources said.
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The rationale: Aramco is reportedly uncertain that there is sufficient demand in the Kingdom to support the investments, with the state-owned oil giant already undertaking expansions at other chemical sites, Bloomberg’s sources say. Aramco has not, however, revised its expansion plans at a Jubail refinery co-owned with TotalEnergies SE.
Looking east? The decision also indicates that Aramco is “recalibrating” its petrochemicals portfolio with a focus on Asia, the business news information service said. The oil player is pursuing several downstream oil investments in China that look to lock in demand for Saudi crude in the long run. Aramco also sees demand for plastics and other petroleum derivatives growing in Asia and is angling for a larger market share in those markets.
REMEMBER- Aramco inked two separate agreements with Chinese refiners Rongsheng and Hengli last month, which saw it inch closer to expanding the Saudi Aramco Jubail Refinery with Rongsheng and acquiring a 10% stake in Hengli. Sabic also shelled out USD 6.4 bn in January to develop a refining hub in China’s Fujian, amid other investments by the oil major in China-based downstream assets.
