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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

 


Saudi Arabia to spend 283 billions on projects as oil soars

  • The Persian Gulf monarchy plans to build 37 large-scale projects

  • The country's income from the sale of crude is expected to increase by 25%

Source: El Financiero en línea

US, August 3.- Saudi Arabia, the Middle East's largest-economy, will spend $283 billion in the next seven years building oil facilities and infrastructure projects as it seeks to capitalize on record oil revenue, Samba Financial Group said.

The Persian Gulf monarchy, which is the world's largest oil-exporter, plans to build 37 large-scale  projects including oil and gas production facilities, refineries, chemical plants and real-estate ventures, Samba said in a report this month.

The country's income from the sale of crude is expected to increase by 25 percent this year to $203 billion, Riyadh-based Samba, Saudi Arabia s largest publicly-traded bank, said in the report on the country s economy received today.

State-run Saudi Aramco accounts for 28.6 percent, or $81 billion, of the total estimated project spending as it seeks to boost production capacity by 14 percent to 12.5 million barrels a day by 2009, the report said.

Saudi is earning about $17 billion per month at current prices from the sale of crude, of which $7 billion is going to the country s central bank to boost its foreign assets, according to the Samba report.

Oil reached a record $78.40 on July 14 on concern that fighting between Iranian-backed Hezbollah militants in Lebanon and the Israeli army may spread in the Middle East, source of almost a third of the world s oil. Crude futures in New York have gained 23 percent in the last year, according to Bloomberg data. (Information provided by Finsat)

 

 
 

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