Kingdom warms to private refining

26 May 2006

The local Arabian Industrial Development Company (Nama) is in negotiations with international companies for a partnership agreement to develop a worldscale refining and integrated petrochemicals complex in the kingdom. A formal announcement on partner selection is expected soon.

The multi-billion-dollar complex will comprise a 400,000-barrel-a-day (b/d) refinery, and a naphtha-based cracker with associated downstream units. A final decision on the location of the complex has yet to be taken.

'We have submitted our applications for the project to the authorities,' says a source close to the project. 'We've been working on it for more than a year, and should be selecting a partner soon.'

Fluor Corporation and the Shaw Group, both of the US, are understood to have completed a scoping study on the scheme.

Saudi Aramco is understood to be looking to allocate 600,000 b/d of sour crude to the private refining sector.

A number of other companies, including Italy's Saras, the local Dhahran for Oil & Gas Company and an unidentified Bahraini firm are understood to be pursuing plans to set up an in-kingdom private refinery.

Aramco recently selected France's Total and the US' ConocoPhillips to partner it on the development of two export refineries in Jubail 2 and Yanbu (see below).

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