In the international energy market, it has become a common occurrence for international energy companies to join forces to develop new projects and upgrade existing ones to reflect market trends. The competitiveness of the global energy market is often overshadowed by the need to cooperate to boost the standing of energy projects. If there is one thing that we can say about energy companies is that they operate under the presumption that the largest energy projects require the input and assistance of several of them.
The United States and Saudi Arabia join forces on the Yanbu refinery upgrades
The United States and the Kingdom of Saudi Arabia have been fostering a new dialogue and beneficial relationship in recent months. The US President, Donald Trump, paid a visit to the Crown Prince Mohammed bin Salman Al Saud of Saudi Arabia in a recent Middle East tour. In the meeting, the pair discussed a wave of new economic opportunities for both countries and the best methods to advance the relationship further.
One mechanism that may be an option for the US and the Kingdom is to work together in the energy sector. In that vein, Exxon Mobil has entered into a joint venture with Saudi Aramco to conduct feasibility studies to upgrade the Samref refinery in Yanbu, as well as expand the existing petrochemical complex. In most cases, to advance and upgrade such a large project requires the assistance of more experienced companies.
The facility has a declared oil processing and storage capacity reaching upwards of 400,000 barrels per day and 13.2 million barrels, respectively. The Samref refinery in Yanbu mostly produces petroleum products such as gasoline, diesel, jet fuel, heating oil, and liquefied petroleum gas. Through the new plan to expand operations, it will become the jewel of the Middle East downstream market.
“Designed to increase the conversion of crude oil and petroleum liquids into high-value chemicals, this project reinforces our commitment to advancing downstream value creation and our liquids-to-chemicals strategy. It will also position Samref as a key driver in the growth of the Kingdom’s petrochemical sector”. – Aramco downstream president Mohammed Y. Al Qahtani
The Samref refinery will require substantial investments to boost output capacity
Both Exxon Mobil and Saudi Aramco will explore significant capital investments to upgrade output and diversify petrochemical production, especially in the new year when the project really gets going. The companies have noted that the plan is to increase production of high-quality distillates, which can drastically reduce emissions at the facility.
The study features an emission reduction strategy that has been developed over the past few months to reduce the substantial emissions from the refinery, a necessity in the current energy market. Upgrading refineries to include new petrochemical output has become the latest trend to sweep across the international energy market.
“We look forward to evaluating this project, which aligns with our strategy to focus on investments that allow us to grow high-value products that meet society’s evolving energy needs and contribute to a lower-emission future. Plans are subject to market conditions, regulatory approvals and final investment decisions by Aramco and ExxonMobil” – ExxonMobil senior vice president Jack Williams
New refineries are being planned across the entire global downstream market
The news that ExxonMobil and Saudi Aramco will conduct the study to assess the viability of the refinery upgrade comes amid a wave of new refineries being planned in nations and regions that have historically been overshadowed or ignored by the international market. For example, Uganda’s proposed $4 billion refinery, which will reshape African energy output in the new year. The Samref refinery is equally owned by Saudi Aramco and ExxonMobil and will boost the global output capacity of petrochemicals.
