Page 5 - DMEA Week 33 2019

DMEA Commentary DMEA
Aramco’s owned and affiliated refineries absorbed 38% of the company’s crude last year, providing a signi cant hedge against the oil mar- ket uctuations of the past few years.
Crude supply agreements have been a central feature of the company’s international invest- ment projects, and the prospectus noted that Saudi oil had accounted for 68% of the feedstock absorbed by its international re neries.
motiva-tion
in the US, another Aramco interest made head- lines this week as Motiva Enterprises signed a deal to acquire a chemical facility nearby its Port Arthur Re nery in Louisiana.
Reports from Reuters suggested that the deal for the Flint Hills Resources Chemical Plant would close later in the year.
Aramco gained control of the 630,000 bpd plant at Port Arthur in Texas during the disso- lution of the Motiva Enterprises JV with Shell in 2017. e Saudi rm formally abandoned a pro- posal to expand the re ning capacity of the re n- ery in June 2018 in light of concerns about the over-concentration of assets at a single site fol- lowing Hurricane Harvey but rea rmed plans to develop a petrochemicals complex nearby.
in late December, documents led with the
local authorities in Texas revealed the shape of Aramco’s plans, which comprise a steam cracker producing polyethylene and other derivatives at an estimated cost of $4.7bn and a $1.9bn aromat- ics complex yielding benzene and paraxylene.
Various sites in Texas and Louisiana were said to have been considered, with an FiD due late this year and completion scheduled for late 2022.
UK-based TechnipFMC and the US’ UOP signed MoUs with Motiva in April to examine the use of their respective mixed-feed ethylene and aromatics technologies in the proposed scheme. Each plant is anticipated to have pro- duction capacity of around 2mn tpy.
Aramco’s senior vice-president of down- stream Abdulaziz Al-Judaimi was quoted earlier this year as saying that the rm intended to raise its US re ning capacity to around 1.5mn bpd. Meanwhile, the Gulf coast strategy aligns with the company’s move towards generating greater value from production, particularly through petrochemicals as the US experiences a glut of feedstock gas.
While the Saudi gas sector has a lot of catch- ing up to do in the oil segment, these investments are clearly positioned to build Aramco’s exper- tise in gas monetisation while exploration e orts continue domestically.™
iPo:
Reports suggest that Aramco sent a request for proposals from banks this week as
the company seeks to resume work towards its initial public offering (IPO). The rm renewed its commitment to the process which was postponed in 2018, but is now expected to take place in 2020 or 2021.
Week 33 22•August•2019 w w w . N E W S B A S E . c o m
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