Saudi Aramco signs deal with Sinopec for Yanbu refinery venture

16 January 2012 04:19  [Source: ICIS news]

SINGAPORE (ICIS)--Saudi Aramco has signed a joint venture agreement with China’s state-owned oil refiner, Sinopec, to build a 400,000 bbl/day refinery in Yanbu on the kingdom's Red Sea coast, the country’s official news agency said over the weekend.

The project, named Yanbu Aramco Sinopec Refining (YASREF), will begin production in the second half of 2014, Saudi Press Agency (SPA) said in a report on its website.

State-owned Saudi Aramco will hold a 62.5% stake in the refinery while Sinopec will own the remaining 37.5%, SPA said.

The cost of the project should be within $10bn (€7.9bn) including debt, Khalid al-Falih, Aramco's CEO and president, was quoted as saying by Reuters at the project’s signing ceremony.

Saudi Aramco is also planning to invest in capacity additions abroad as well as new refineries in Jubail and Jizan and the revival of a plan to expand the refinery in Ras Tanura, the Reuters report said.

"Over the next decade our total global refining capacity is expected to approach 8m bbl/day," al-Falih was quoted as saying by Reuters.

China signed a number of energy agreements with Saudi Arabia on Sunday as part of a trip by Premier Wen Jiabao to key oil-producing countries in the Middle East.

A memorandum of understanding between SABIC and Sinopec was also signed over the weekend to build a plant to produce polycarbonate (PC) at Tianjin in China, the SPA said, without providing details.

An agreement between the two governments on the peaceful usage of nuclear energy was also signed, the SPA said.

($1 = €0.79)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Nurluqman Suratman

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