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French supermajor TotalEnergies and Saudi oil giant Aramco will build a massive petrochemical complex in Saudi Arabia worth $11 billion, the two companies said in a joint statement on Thursday.
The “Amiral” petrochemical complex will be owned, operated, and integrated with the existing SATORP refinery in Jubail on Saudi Arabia’s eastern coast.
The petrochemical facility will enable the SATORP refinery to convert internally produced refinery off-gases and naphtha, as well as ethane and natural gasoline supplied by Aramco, into higher value chemicals, helping to advance Aramco’s liquids to chemicals strategy, the companies said.
Expansion of the petrochemicals business at home and abroad is a pillar of Saudi Aramco’s strategy to capture more of the market segment where oil demand is expected to grow for decades.
Of the $11 billion investment in the petrochemical project, $4 billion will be funded through equity by Aramco (62.5%) and TotalEnergies (37.5%). Construction of the complex is expected to begin in the first quarter of 2023 with the goal of launching commercial operations in 2027.
The complex will include a mixed feed cracker capable of producing 1.65 million tons per annum of ethylene, the first in the region to be integrated with a refinery, and two state-of-the-art polyethylene units using Advanced Dual Loop technology, a butadiene extraction unit, and other associated derivatives units.
The facility will eventually provide feedstock to other petrochemical and specialty chemical plants in the Jubail industrial area, which will be built, owned, and operated by globally renowned downstream investors, expected to invest an additional $4 billion in the industry, Aramco and TotalEnergies say.
“We are delighted to write a new page of our joint history by launching this expansion project, building on the successful development of SATORP, our biggest and most efficient refining & petrochemicals platform in the world,” TotalEnergies CEO Patrick Pouyanné said.
“This world-class complex also fits with our strategy to expand sustainably in petrochemicals by maximizing the synergies within our major platforms,” the executive added.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com
Moreover, this project fits very well with Saudi Aramco’s strategy of capturing more growth markets for its oil and petrochemical products.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert