Page 4 - DMEA Week 33 2019

DMEA Commentary DMEA
Aramco restarts
Malaysian CDU as
US influence grows
Saudi Aramco is stepping up its efforts to achieve its 8-10mn bpd re ning target, driving project progress and keeping spending down so as to acquire more assets
middle east
What:
Aramco and Petronas have begun restarting their JV CDu in Johor, while the Saudi rm’s US subsidiary has agreed to buy a chemical facility near its agship asset.
Why:
Aramco last week agreed provisional terms for
a stake in RIL’s oil-to- chemicals business and shows no signs of slowing down with its efforts
to grow downstream capabilities.
What next:
The rm will need to keep spending to achieve its re ning target of 8-10mn barrels per day by 2030, but this is beginning to look more likely.
SAUDi Aramco’s overseas re ning e orts have been in the headlines this week, with progress being made towards start-up at its facility in Malaysia as the rm’s footprint expands on the US Gulf coast.
The company’s ambitious refining targets focus on signi cant inorganic growth and follow hot on the heels of last week’s announcement of a deal being in the works to acquire a 20% stake in indian giant Reliance industries Ltd’s (RiL) oil-to-chemicals business.
Aramco’s joint venture integrated down- stream project with Malaysia’s Petronas this week restarted a crude distillation unit (CDU) at the complex in Johor.
The Pengerang Refining & Petrochemical Co. (PRefChem) is part of the broader $27bn Refinery & Petrochemical integrated Project (RAPiD), which is a 50:50 JV between the two companies in Pengerang.
Reuters quoted Petronas as saying: “We con- rm that the re nery has started feeding crude to its CDU earlier this week in e orts to restart the plant.”
e Pengerang integrated Complex is made up of a 300,000 barrel per day (bpd) re nery and a 7.7mn tonne per year petrochemical facility, which includes a 1.2mn tpy naphtha cracker.
Mechanical completion of the re nery was
announced in November by UK-based engi- neering, procurement & construction (EPC) contractor Petrofac and trial runs at the CDU began in the rst week of January, processing Saudi crude.
Under the agreement, Aramco will supply 50% of the re nery’s crude feedstock with the option of increasing it to 70%.
e trials ended in April for safety checks a er a re broke out during trial runs of the res- idue desulphuriser. Reuters reported at the time that contractors were continuing to assess the extent of damage at the re-hit ARDS.
Aramco aims to raise global re ning capacity to 8-10mn bpd by 2030, with expansion focused on major Asian consumers of the kingdom’s crude. Downstream investment projects in China, india, indonesia, Malaysia and Pakistan are at various stages of execution.
Most of its current 4.9mn bpd capacity is produced through JVs, with around 2-3mn bpd of the total envisaged being converted to petro- chemicals, to add to the 17mn tpy of petrochem- icals already produced.
Gross and net refining capacity stood at 4.9mn bpd and 3.1mn bpd respectively at the end of 2018. e two gures were anticipated to increase to 5.6mn bpd and 3.7mn bpd by the end of this year.
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w w w . N E W S B A S E . c o m Week 33 22•August•2019