Corrected: SABIC, Saudi Aramco eye expanding scope of oil-to-chemicals project

SINGAPORE (ICIS)–Saudi Aramco and SABIC are now looking at integrating existing refineries in Yanbu, Saudi Arabia with a world-scale mixed feed steam cracker and downstream olefin derivative units, as part of their planned oil-to-chemicals project.

The scope of the original project is being re-assessed “to maximize the economic value while evaluating the optimal technical options and market risks”, SABIC said in a filing on the Saudi bourse, Tadawul, on 18 October.

The planned oil-to-chemicals complex first announced by Saudi Aramco in 2017 was estimated to cost between $20bn-30bn.

The planned full-integrated complex initially scheduled for completion in 2025, is expected to process 400,000 bbl/day of crude oil to produce about 9m tonnes/year of petrochemicals.

Saudi Aramco formed in mid-September an integrated corporate development organization, which was tasked to review the company’s asset portfolio and identify growth opportunities.

Its full-year capital expenditure (capex) is expected to come in at the lower end of its $25bn-30bn target, as profitability this year has been hit by a plunge in global energy demand in the wake of the coronavirus pandemic.

Saudi Aramco’s first-half 2020 net profit plunged by more than half from the previous corresponding period, while SABIC – which is 70%-owned by the oil giant – swung into a net loss in the same period.

“SABIC and Saudi Aramco remain committed to continue advancing crude to chemicals technologies through existing development programs with the goal to increase cost efficiency, competitiveness and value creation opportunities for petrochemicals,” SABIC said.

Saudi Aramco, which is the world’s biggest exporter of crude oil, has been diversifying more into downstream petrochemicals since the slump in oil prices 2014.

It listed on the Saudi Stock Exchange in December 2019, and its major ventures into petrochemicals include acquisitions of a 50% stake in Malaysia’s refinery and petrochemical integrated development (RAPID), and a 70% stake in SABIC, which was completed in June this year.

Photo by Saudi Aramco

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