Page 4 - DMEA Week 16 2021

DMEA COMMENTARY DMEA

Saudi moves forward

with downstream

expansion

Despite attacks on the Kingdom’s oil facilities, Saudi Arabia is proceeding
with efforts to diversify its economy through the downstream sector.

MIDDLE EAST DRONE and missile attacks have seen Saudi oil down by the Saudi military.
infrastructure make headlines for all the wrong In addition to its proximity making it an obvi-
reasons, but this should not overshadow the ous target for the Houthis, Jazan’s distance from
WHAT: Kingdom’s efforts to expand the downstream the Eastern province oil production and asso-
Aramco is ramping up sector as a driver of economic diversification. ciated pipelines, cargoes of crude are shipped
operations at Jazan while While the Saudi Aramco refinery at Jazan has there by sea. Around 4mn barrels were shipped
petrochemicals projects repeatedly come under fire from Yemen’s Houthi there in late 2019 ahead of the refinery begin-
on the other side of the militia in recent months, the company is contin- ning operations, with Nasser noting that further
country continue to make uing to ramp up operations there. crude cargoes arrived in Q1 this year.
progress. On the other side of the country, Saudi’s pet- According to commodity data firm Kpler,
rochemical hub at Jubail continues to grow with the facility received an average of 281,000 bpd in
WHY: work ongoing to set up the world’s largest pro- March, up from 167,500 bpd in February with
The downstream pane dehydration (PDH) plant. crude transported from Aramco’s Ras Tanura
sector is key to the and Ju’aymah terminals north of the compa-
Kingdom’s Vision 2030 Jazan ny’s Dhahran HQ, all of which also came under
plan with the expansion Following the start of commercial operations attack in March.
of petrochemicals in at Jazan last month, Aramco has been increas- Jazan has been the source of numerous head-
particular seen as ing throughput at the refinery from the initial aches for Aramco. In the company’s 2020 Annual
a crucial factor in 200,000 barrels per day (bpd). Report, it noted: “Saudi Aramco recognized an
diversifying the economy. Announcing the start-up, the company’s impairment of SAR13,646mn [$3.6bn] for the
President and CEO Amin Nasser said that it year ended December 31, 2016 primarily related
WHAT NEXT: would bring the facility into operation in two to the Jazan integrated petrochemical refinery
Operations at Jazan will stages, reaching its 400,000-bpd capacity by the under construction and two existing domestic
ratchet up towards its end of the year, though reports have suggested refineries.”
400,000-bpd capacity that sometime in 2022 is more likely. Delays were caused when the decision was
while various petchem Jazan refinery is located around 60km from taken to move the under construction refinery
facilities take shape or the Yemen border and has been the subject of to make way for new export facilities.
are expanded in Jubail. at least three missile attacks over the past two Also located within the ‘Economic City’ is the
months though all projectiles have been shot Jazan Integrated Gas Combined-Cycle (IGCC)

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