In-Kingdom downstream

In Saudi Arabia, we manage a downstream network that encompasses gas fractionation, refining, distribution, power generation that efficiently supports our operations, and to create favorable conditions for investment and growth.

Within this system are the Sadara chemicals joint venture and Petro Rabigh (an integrated refining and chemicals company), eight refineries (three wholly owned), 23 bulk plants, two international airport refueling sites, more than 21,000 km of pipelines, and 20 export berths at six marine ports, including the Port of Ras Tanura — the world’s largest group of crude oil export terminals.

We partner with world leading refining and chemicals companies in Saudi Arabia to produce a slate of products for domestic and international customers, generating greater value from our resource base and expanding market opportunities for our products with conversion industries and manufacturers. We are the sole supplier of refined products to the large and growing domestic market. And because our upstream operations supply crude oil directly to our domestic refining system through our extensive pipeline network, we optimize supply costs.

Jazan Refinery

Our fourth wholly owned refinery, expected to be on stream in 2018, is located in Jazan in the Kingdom’s southwest region, and is designed to add 400,000 bpd of capacity to our domestic network.

The refinery and terminal facilities are the industrial heart of the government’s greater Jazan Economic City project, and part of a broad plan to drive sustainable economic development in the region and create employment opportunities for Saudis.

Over a 15-year period, more than 70,000 new jobs could be created as the industrial city attracts a range of medium and light industries and associated service companies. The overall project includes a marine terminal and an integrated gasification combined cycle power plant with the capacity to generate 3.7 gigawatts of electricity.

Yanbu’ South Terminal with the crude oil terminal is expected to begin in 2019. The additional capacity enables crude oil deliveries to the YASREF (Yanbu Aramco Sinopec Refining Company) and Jazan refineries while maintaining our West Coast export capability.

In support of our strategy to optimize supply and distribution of petroleum products in the Western region, we began a project to convert the industrial complex that includes our wholly owned Jiddah Refinery into a petroleum products distribution center, without refining operations. The conversion project also seeks to enhance safety and environmental performance. And the loss of the relatively low refining capacity of the 50-year-old Jiddah Refinery — 77,000 bpd — will be more than offset by our YASREF and SATORP (Saudi Aramco Total Refining and Petrochemical Co.) joint ventures in Yanbu’ and Jubail, respectively, and by the startup of our Jazan Refinery.  

Toward a top-tier chemicals business

Our chemicals operations span the sector from the production of basic chemicals such as aromatics, olefins, and polyolefins, to more complex products, including polyols, elastomers, and advanced synthetic rubber.

In Saudi Arabia, our operations supply all of the feedstock required by our chemicals facilities and all of our domestic chemicals joint ventures. Most of our international joint ventures are integrated with refineries, providing production flexibility, and opportunities for cost competitiveness.

Our aspiration is to become a top-tier, globally integrated chemicals business. We are pursuing three routes to fulfill this aspiration: Leveraging existing assets, developing a global business platform, and seeking selective organic and inorganic growth. In 2017, we began work to launch a wholly owned subsidiary, Aramco Chemicals Company, to consolidate and manage the marketing of certain chemical products.

Our chemicals expansion strategy is supported by our expectation that the petrochemicals industry will be the fastest growing sector for crude oil, accounting for 15% of all crude oil demand by 2040. By increasing our participation in this market, we seek to create greater long-term value from our resource base and enhance our resilience to oil market fluctuations.

Completing chemicals mega-projects: Sadara and Petro Rabigh

Sadara, our joint venture with The Dow Chemical Co. in Jubail Industrial City, began full operation of the last of its 26 plants during the year. The facility achieved reliable operations at full design feed capacity of 85 million scfd of ethane and 53,000 bpd of naphtha.

At our Petro Rabigh venture with Sumitomo Chemical on the Red Sea Coast, we achieved mechanical completion of the Rabigh Phase II project, which includes a new aromatics complex, an expanded cracking facility, and differentiated polymer units. Commissioning and start up of all units is expected in 2018. 

Transforming power

Our investments in power, which primarily support our upstream and downstream operations, seek to achieve economies of scale by considering adjacent demand centers and capturing opportunities for advantaged fuels. In addition, our strategy is to identify opportunistic growth in the domestic power market.

We continued to transform our power business from dependency on third parties to self-sufficiency in electricity and cogenerated steam, while maintaining a steadfast concentration on safety, reliability, and energy efficiency. In 2017, we maintained self-sufficiency in power generation, with excess power exported to the national grid under a commercial agreement. Company power efficiency reached 67% by year-end, an improvement of 1% over the previous year.

In 2017, we created Aramco Power. Its establishment advances the transformation of the company’s power business to a sustainable commercial business through the generation of service and trading revenues.

The joint venture power cogeneration facilities at our Hawiyah Gas Plant, Abqaiq Plants, and Ras Tanura Refinery were operational in 2017. In addition, the construction progress on the cogeneration facility integrated with our Fadhili Gas Plant reached 51% at year-end.

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