Page 20 - DMEA Week 01 2021

DMEA REFINING DMEA

Sudan’s sole oil refinery begins maintenance

SUDAN SUDAN’S only working oil refinery began a scheduled to begin in September but was
70-day maintenance routine on December 20, delayed. The pricing policy for fuel after the work
The facility is Sudan’s leaving the economic crisis-stricken country’s has concluded has not been decided on yet, a
only working refinery consumers dependent on fuel imports. ministry representative told Reuters.
with a 100,000 bpd The 100,000 barrel per day (bpd) plant in Sudan’s most severe shortages occurred in
throughput capacity. Sudan’s capital Khartoum has served as the February, because of a blockage in a pipeline that
Northeast African state’s only domestic source pumps crude oil from fields in Kordofan State
of fuel since a plant at Port Sudan was closed in to the Khartoum refinery. But the government’s
2013. Its maintenance run will drive up fuel costs limited foreign currency reserves have been a
and will likely exacerbate shortages. The coun- recurring problem throughout the year. To alle-
try has been struggling with shortages and long viate these difficulties, Sudan in April allowed
lines at gasoline pumps for much of this year, as the private sector and banks for the first time to
authorities have had difficulty coming up with import fuel for the transportation, mining and
the foreign currency to pay for imports. industry sectors.
Sudan’s government is looking to phase out The government is yet to say when it intends
fuel subsidies to reduce its budget deficit. As part to end its fuel subsidy regime completely. It is
of this effort, it introduced a two-tier pricing sys- under pressure to do so by the World Bank, and
tem in October, under which imported gasoline the IMF and other international financiers. But
and diesel are sold a more than double the price the authorities are reluctant to adopt auster-
of domestic supplies. ity measures too hastily for fear of putting too
While work continues at the Khartoum refin- great a financial burden on the population. The
ery, however, only imported gasoline and diesel change in pricing policy in October led to pro-
will be available to consumers at filling stations, tests erupting across the country.
Sudan’s energy ministry said in a statement on Sudan reached an agreement in 2018 with
December 20. Any fuel that is produced locally Russian state exploration company Rosgeologia
will be saved for the agriculture, electricity, pub- on developing a 200,000 bpd greenfield refinery
lic transportation and security sectors. in Port Sudan. But no timeline for work on this
The maintenance programme was previously facility has yet been announced. ™
PETROCHEMICALS

Saudi petchem firm strikes offtake

deals for new plant

SAUDI ARABIA SAUDI petrochemicals producer Advanced turn receive propane supplies from state-owned
Petrochemical has struck deals on the offtake Saudi Aramco.
The deals cover polypropylene (PP) supplies from a new plant it McDermott International unit Lummus
620,000 tonnes of is building in Jubail. Technology will provide its CATOFIN tech-
annual PP supplies. The contracts were reached between subsid- nology for the PDH unit, while Italy’s Basell
iary Advanced Global Investment (AGIC) and Poliolefine Italia will supply SPHERIPOL and
traders Vinmar, Tricon and Mitsubishi. They SPHERIZONE technologies for the PP facility.
will commence when the plant starts up, which US firm Fluor was also picked as a project man-
is expected in the second half of 2024. agement consultant in May.
The deals cover 620,000 tonnes of annual PP Advanced, which already produces around
supplies, with Vinmar and Tricon each agreeing 450,000 tpy of PP in Jubail, secured a SAR1.5bn
to take 250,000 tonnes per year and Mitsubishi ($400mn) credit facility from Riyadh Bank,
120,000 tpy, until their expiry at the end of 2028. Samba Financial Group and Al Rajhi Bank to
They will account for 77.5% of the plant’s name- finance its expansion plans in July. The following
plate capacity of 800,000 tpy. month it obtained a SAR3bn loan from the Saudi
Advanced formed a joint venture in April with International Development Fund. The company
South Korea’s SK Gas to build and operate the pro- in October opted to add a 70,000 tpy isopropanol
ject, initially valued at $1.8bn. The Saudi firm has plant to the project, raising costs by $80mn.
an 85% stake in the partnership, while SK Gas has Advanced registered a 26.7% year-on-year
15%. The pair intend to begin construction in 2021. decline in profits in January-September to
Feedstock propylene for the plant will be SAR416mn. Its board has backed a SAR141mn div-
supplied from a planned integrated propane idend for the fourth quarter of 2020, however, bring-
dehydrogenation (PDH) plant, which will in ing total distributions for last year to SAR563mn. ™

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