A consensus may have formed…
OPEC is on the brink…
Total’s chief financial officer has announced that the group’s giant Jubail refinery in Saudi Arabia is finally in operation (part of it at least) and the first ever tanker is expected to arrive on Monday to export refined products.
Parts of the 400,000 barrel a day facility, owned jointly by Total and Saudi Aramco, have begun operation over the last few months, with full capacity expected to be reached by the end of the year.
The first of the two 200,000 barrel a day crude distillation units (CDU) is currently in operation, but the other is not expected to start up for while yet.
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Saudi Arabia’s demand for refined products has begun to grow in recent years, and is only expected to continue growing in the future. In fact the giant oil producing nation is actually predicted to become a net oil importer if demand continues to grow at the current rate. It is hoped that the increased refinery capacity added by the Jubail refinery will help the country to meet its own demand of refined product and reduce its increasing reliance on imports.
The multi-billion dollar refinery is crucial to the country’s plans to meet growing domestic demand for gasoline, and is expected to replace most imports by 2014.
Saudi Arabian heavy crude oil will be refined into a range of fuels at the facility, from gasoline to petroleum coke. The main products will be gasoline and gasoil which will be used to meet any domestic demand; any excess will then be exported.
Most of the diesel to be exported from the refinery will head to the European market, where traders believe it will cause huge changes, pushing Indian diesel out of Europe, and forcing it into Asian markets.
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Patrick de La Chevardiere, Total’s CFO, told investors on Monday morning that “the vessel is due to arrive today,” although he gave no details as to the destination or size of the load.
A source told Reuters in early September that Saudi Aramco would provide 80,000 tonnes of fuel oil for export in late September, and that Total would be able to export two shipments by the end of the month.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com