Saudi oil giant Aramco will be heavily investing in increasing its refining capacity and chemicals business in pursuit of securing more downstream markets for its crude oil, Aramco’s Senior vice president of Downstream, Abdulaziz Al-Judaimi, told Reuters in an interview published on Tuesday.
Aramco, which produces around 10 million bpd of crude oil, aims to increase its refining capacity from 5 million bpd now to 8 million bpd-10 million bpd, and to double its petrochemicals production by 2030, Al-Judaimi said.
“Our strategy is very simple. We want to be at 8 to 10 million barrels per day of participated (refining) capacity … (and) we are going forward by trying to be a top leader in chemicals by 2040,” the manager told Reuters.
The chemicals business is Aramco’s key strategy for the decades to come to diversify the risk of a slowdown in oil demand.
The Saudi energy giant is looking to its home the Middle East and to Asian markets to boost its refining and petrochemicals production capacities.
Aramco has recently announced an initial agreement to build a mega refinery and petrochemicals complex on India’s west coast with a consortium of Indian oil companies. The mega project, estimated to cost US$44 billion, is planned to have a huge refinery capable of processing 1.2 million bpd of crude oil.
Aramco also has a project in Malaysia with the national oil firm Petronas for the Refinery and Petrochemical Integrated Development (RAPID) project slated for the 300,000-bpd refinery start-up in Q1 2019.
The Saudi oil firm is also boosting its refinery capacity in one of its single biggest crude oil customers—China, where it is in talks with CNPC to finalize the acquisition of a stake in the operational Yunnan refinery, and is also talking to other potential refiners for stakes, Al-Judaimi told Reuters.
“Asia has to have the lion’s share … We believe markets east of the Suez Canal will continue to grow, including the Middle East as well,” the manager said.
For the domestic market, Aramco signed in April a memorandum of understanding with France’s oil major Total to build a giant petrochemical complex in Jubail, which will see total investments of US$9 billion by the two companies and third-party investors.
Saudi Aramco and Saudi Basic Industries Corp (SABIC) also plan to develop a fully integrated crude oil to chemicals (COTC) complex, with Aramco planning to make a final investment decision on the project by the end of next year, Al-Judaimi told Reuters.