Aramco cancels Saudi project amid Asia focus

Aramco

Aramco, the world’s largest oil producer, has scrapped plans for a refinery and chemicals project in Saudi Arabia to focus on Asia expansion, mainly in China.

The 400,000 barrels per day (bpd) facility at Ras Al Khair, which was being planned in collaboration with Saudi Basic Industries Corporation, an Aramco subsidiary, has been cancelled, Bloomberg reported, citing informed sources.

A proposal to move the project to Jubail has also been put on hold.

Three planned chemical facilities in Jubail and Yanbu on the Red Sea are under review due to concerns over a potential slowdown in domestic demand, the report said.

This decision follows Aramco’s increased investments in Asia, where the oil major is pursuing chemical sector deals and finalising long-term oil supply agreements with China. 

Despite the challenges, Aramco intends to continue to develop its liquids-to-chemicals business, Bloomberg reported, citing a company statement.
 
The goal is to increase throughput in integrated refining and petrochemicals complexes to up to four million bpd by 2030, the statement said.

• Aramco ties with China for industrial manufacturing
• Investment and trade are on a steady eastward trajectory
• China’s energy security is ‘set in stone’ says Aramco CEO

Last month Aramco said it was accelerating plans to expand the liquids-to-chemicals project in Jubail in collaboration with China’s Rongsheng Petrochemical Company.

Saudi Arabia, the Gulf’s biggest economy, has attracted greenfield FDI of nearly $29 billion, more than double the total in 2022.

China was by far the biggest investor, with $16.8 billion, reflecting Saudi Arabia’s pivot to the East since the “watershed” visit of President Xi Jinping to Riyadh in December 2022. 

This month King Salman International Airport Development Company (KSIADC) signed an agreement with EWPartners, an investment company backed by Saudi Arabia’s Public Investment Fund, to establish a special economic zone to increase trade with China.