Saudi Arabia signs for refinery
Saudi Aramco and Total have
signed a comprehensive memorandum of understanding (MOU) related to the
planned development of a 400000 barrel per day world-class,
full-conversion refinery in Jubail, Saudi Arabia.
The
proposed refinery will be designed to process Arabian heavy crude and
will produce high-quality refined products that meet current and future
product specifications. The project is currently scheduled to start up
in 2011.
“This proposed project
represents an excellent opportunity to build on the Kingdom’s strategy
of addressing global energy demand while attracting foreign investment
to expand its economy,” said Abdallah S Jum’ah, Saudi Aramco’s president
and chief executive officer. “I am proud that Saudi Aramco can support
the Kingdom in this process, and I am gratified that our friends and
colleagues from Total will be our partners in this world-class project,”
he added.
“Total is proud to have been
chosen by Saudi Aramco to build an efficient and full conversion
refinery that will provide the country with an increased capacity to
meet different markets needs in refined petroleum products,” said
Thierry Desmarest, Total chairman and chief executive officer. “This
agreement reinforces our presence in Saudi Arabia and through this long
term project strengthens our close cooperation with Saudi Aramco,” he
added.
The MOU sets out the
agreement between Saudi Aramco and Total regarding the key parameters of
the project, the project configuration, and a broad range of the major
technical, commercial, legal, and financial terms.
To proceed as quickly as
possible with the project, the parties have agreed to undertake without
further delay a comprehensive joint front-end engineering and design
(FEED) study. The definitive documents to implement the project will be
negotiated in parallel with the joint FEED study.
In terms of the project’s
commercial structure, Saudi Aramco and Total have agreed to form a joint
venture company, with each holding an ownership interest of 35 per cent.
Subject to required regulatory approvals, the parties are planning to
offer up to 30percent interest in the project to the Saudi public.
Saudi Aramco will supply the
project with 400000 barrels per day of Arabian heavy crude oil. Saudi
Aramco and Total will share the marketing of the refinery production.
Speaking at the MOU signing,
Jum’ah explained the importance of this latest project: “Our industry is
in the midst of a tremendous period of change, and I would argue, at an
historic crossroads – or as the old proverb says, we are living in
interesting times. We are producing more energy than at any time in
history, are operating more efficiently than ever before, and continue
to have a tremendous impact on societies and economies around the globe.
But what the petroleum industry has gained in efficiency we have lost in
flexibility, in part due to chronic global underinvestment in facilities
and infrastructure.”
He then went on to describe
the importance of downstream investments to the country’s economy:
“Perhaps nowhere along the value chain do we see capacities as tight as
they are in the refining sector. Crude oil is of little good to the
average end-user until it is refined into useful products, and at the
moment, our industry’s ability to do that is being stretched. That is
why downstream investments – like the Jubail export refinery – are so
critical at this point in time, and why forward-looking companies like
Total and Saudi Aramco are working so diligently to meet the refining
challenge. This facility in particular, with its ability to process
large quantities of heavy crude, not only eases tight refining
capacities but also addresses the mismatch between available crude
supplies and refinery configurations that is complicating today’s market
situation.”
Courtesy:
Engineer Live Magazine
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