Most of the gasoline and diesel produced at two new oil refineries being built in Saudi Arabia will be sold on the domestic market, despite being planned as export facilities.
The Jubail and Yanbu Export Refineries will each have a capacity of 400,000 barrels a day (b/d) when completed in 2013 and 2015 respectively, but the offtake of both gasoline and diesel will remain in the kingdom.
“Due to a deficit [of gasoline and diesel, oil major Saudi] Aramco will buy all of the offtake to fuel the ever-growing domestic demand,” says a source familiar with both projects. “The majority of the jet fuel produced will be exported, as will chemicals such as propylene, but the rest will stay in-kingdom.”
The Jubail refinery is being built by the Saudi Aramco Total Oil Refinery and Petrochemical Company (Satorp) and is a joint venture of Aramco, which owns 62.5 per cent, and France’s Total, which owns the remaining 37.5 per cent.
Gasoline and diesel will comprise about 72 per cent of the offtake of the Satorp complex, which is being built in Jubail next to Aramco’s $20bn petrochemicals joint venture with the US’ Dow Chemical.
The Yanbu refinery is being developed by the Red Sea Refining Company, a joint venture of Aramco and China’s Sinopec with the same ownership percentages as Satorp. Sinopec signed the deal with Aramco in March after the US’ ConocoPhillips dropped out (MEED 17:3:11)
The complex will produce 90,000 b/d of gasoline and 263,000 b/d of ultra-low sulphur diesel when completed.
“Both of these refineries prove that Saudi Arabia is starting to compete with China as a global refining player,” says the source. “With the Jizan refinery also coming on stream in 2017 the booming demand for fuel should be met.”
Recent research by the UK’s HSBC bank stated that the kingdom will import about 248 billion litres of gasoline and diesel in the next 10 years, worth about $170bn.