Top five downstream stories from Saudi Arabia in 2018

Saudi Arabia's petrochemicals sector is expected to grow by an average of 5.6 percent over the next four years, as the kingdom accelerates development of large-scale downstream projects, according to the research consultancy BMI. The Kingdom is making a push towards strengthening its downstream portfolio by awarding multi-billion dollar refining and chemical schemes in its upcoming industrial cities and also venturing into sectors that will remain viable in the future.

Argaam compiles a list of top five downstream announcements from Saudi Arabia in 2018 supporting the Kingdom’s current focus in line with Saudi Vision 2030.

1) Saudi Aramco creates fuel retail subsidiary

State oil giant Saudi Aramco announced the creation of the Saudi Aramco Retail Company (RetailCo), a wholly-owned subsidiary, in order to cater to the Kingdom's fuel retail business and expand its downstream business. The new company will grow its operations in the automotive fuel segment, offering customers enhanced services and quality products while implementing a sustainable and profitable business model that delivers a new and stable source of revenue for the company, the firm said in a statement.

Read - Saudi Aramco ventures into Kingdom's fuel retail business

2) Saudi Aramco and Total to build Jubail Petrochem Complex

In April 2018, Saudi Aramco and France’s Total signed a memorandum of understanding (MoU) to build a $9 billion petrochemical complex in Jubail in Saudi Arabia. The complex will be integrated within the Saudi Aramco Total Refining & Petrochemical Company (Satorp) facility in Jubail, a joint venture in which Aramco owns 62.5 percent and Total 37.5 percent. The project will produce more than 2.7 million metric tons of high value chemicals, and will create 8,000 local direct and indirect jobs.

Read - Saudi Aramco, Total sign FEED contract for Jubail complex

3) McDermott wins Saudi contract from Samsung

Samsung Engineering Saudi Arabia Co. Ltd. awarded McDermott International a contract for a total of 23 storage tanks for its Ethylene Oxide (EO)/Ethylene Glycol (EG) plant in Jubail, Saudi Arabia. Samsung is building a $700 million EO/EG plant at Jubail Industrial City and expects construction to conclude in 2020.

Read - McDermott wins storage tank EPC contract in Saudi Arabia

4) Saipem bags Aramco’s gas plant pipeline deal

Italy-based oil and gas contractor Saipem was awarded an engineering, procurement and construction (EPC) contract by Saudi Aramco for a pipeline package as part of its Haradh gas compression plant (GCP). The scope of work on the project encompasses the construction of a system of pipelines of various diameters, with an overall length of over 700 kilometres, and includes flowlines, trunklines and transmission lines, as well as associated facilities for the transportation of gas from various points of storage and distribution inside the Haradh plant.

5) Aramco and Adnoc to build petrochemicals complex in India

State-owned Abu Dhabi National Oil Company (Adnoc) and Saudi Aramco signed an agreement to jointly invest in a $44 billion refinery and petrochemicals complex on India’s west coast. The refinery will provide feedstock for the integrated petrochemicals complex, which will have the capacity of producing approximately 18 million tonnes per annum of petrochemical products.

Read - Saudi Aramco, UAE’s ADNOC partner to build India’s $44 bln refinery

Write to Paromita Dey at paromita.d@argaamplus.com