Saudi Aramco expects to raise its refining capacity to 8 million barrels per day (bpd) as it increases downstream investments, its chief executive officer said, after signing a $10 billion refinery deal with China's Sinopec Group. "Over the next decade our total global refining capacity is expected to approach 8 million barrels per day," Khalid al-Falih, Aramco's CEO, said in a speech at the signing ceremony.
The new figure exceeded a goal Falih cited last year for a 50 percent increase in capacity to over 6 million barrels per day (bpd). He has said repeatedly that, while other companies are reducing exposure to the refining business, Aramco sees it as a growth industry. "Let me stress that the various world-class local and international refining and petrochemical investments Saudi Aramco is making are a testament to our firm belief that the downstream remains an attractive and profitable business," he said on Saturday.
At the ceremony, the state-run Saudi and Chinese companies finalised an initial agreement signed last year to develop a 400,000 barrel per day (bpd) refinery in Yanbu, on the kingdom's Red Sea coast. Aramco will hold a 62.5 percent stake in the joint venture formed to develop Yanbu Aramco Sinopec Refining Co (YASREF), and Sinopec will own the rest.
The cost should be within $10 billion including debt, Falih said. The refinery is due to come on line in 2014. Other additions to capacity will involve Aramco's investments abroad, plans for new refineries in Jubail and Jizan and the revival of a plan to expand Ras Tanura, already the Middle East's largest refinery, Falih said. "We will come back to the Ras Tanura expansion within the next decade or so," Falih said at a press conference, adding that Aramco had delayed the project when it launched Jizan.