Saudi Aramco, increasingly looking to expand in downstream activities, will raise its domestic refining output capacity to 3.5 million barrels per day (bpd) by 2016 with the start-up of new plants, an Aramco executive said Monday. "Soon we will see additions to this picture," Mohammed Al-Omair, vice president of refining and natural gas liquids (NGL) fractionation at Saudi Aramco told an industry conference, referring to the seven refineries Aramco operates, alone and with other partners. "We can see that total current in-Kingdom refining capacity is 2.26 million bpd. With the addition of the three facilities, the capacity will have increased...in 2016 to almost 3.5 million bpd." Omair said the additions will come from the three refineries whose development is now under way and which will have a capacity of 400,000 bpd each. "The first is our joint venture in Jubail with Total (Satorp), it will begin commissioning in 2012. Red Sea refining in Yanbu will begin commissioning in 2014, and Jizan refinery in 2016, while each of the new refineries will be designed keeping petrochemical products such as benzene, xylene and paraxylene in mind. Sasref (Aramco-Shell Jubail refinery) is already producing benzene." The 550,000 bpd Ras Tanura refinery alone supplies more than 30 percent of the kingdom's fuel demand. Aramco is upgrading the refinery to produce cleaner fuels as part of a wider plan to meet environmental regulations. The Kingdom's domestic fuel consumption has been booming on the back of rising population and economic growth. Aramco also considers building three new joint venture refineries in Asia as part of plans to boost its global refining capacity by 50 percent to more than 6 million barrels per day (bpd), the chief executive of Aramco, Khalid Al-Falih, said in April. Asia is Aramco's largest and fastest growing oil market. "We continue talks about expansions. I am sure it will yield results, but investments in the international (market) do take a lot of time before we get to see things happening in reality but these are part of the portfolio Saudi Aramco has as plans for the downstream investments," Omair said when asked about an update on investments in Vietnam, Indonesia and another refinery project in China. Aramco operates refineries in the United States, South Korea, Japan and in China - the Fujian refining and petrochemical company (FREP). Aramco plans to balance its energy portfolio by increasing exposure to downstream industries in its energy mix, while maximizing its profits from existing oil and gas streams, its chief executive said this month when signing a giant petrochemical joint venture with US Dow Chemical, called Sadara. "According to a recent study by Morgan Stanley in Europe we see that many premier companies integrate their refining products, one as much as 90 percent. We too, within Aramco, are striving to do the same within the Kingdom," Omair said, citing plans of Rabigh II and the Sadara project. Aramco plans to use gas liquid and refined products as feedstock in its new ventures. It is raising gas and NGL output to cater for rising domestic demand for petrochemical feedstock.
