Page 13 - AsianOil Week 43 2020

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Aramco scales back chemical plans with some of its neighbours through its support
Saudi Aramco is looking to downsize a plan to for Yemen’s Houthi rebels.
build a $20-30bn oil-to-chemicals complex in
the kingdom’s western port city of Yanbu, as it If you’d like to read more about the key events shaping
reassesses its downstream expansion plans in the downstream sector of Africa and the Middle East, Secretary of State
light of weak market conditions. then please click here for NewsBase’s DMEA Monitor.
Aramco unveiled the project in 2017, esti- Mike Pompeo
mating at the time it would process 400,000 French govt. blocks $7bn US LNG deal is leading a
barrels per day (bpd) of crude to produce 9mn France’s Engie has reportedly delayed signing
tonnes per year (tpy) of chemicals and base oils. a $7bn contract to buy US LNG, after pressure diplomatic push
That would make the complex the largest of its from the French government to seek cleaner
kind in the world. It was due to start up in 2025. supplies instead. But the US government also to convince
However, Aramco and newly acquired sub- plans to intervene to convince French officials to
sidiary SABIC said last week they were consid- let the deal go ahead. France to change
ering integrating Aramco’s existing refineries France’s government, a minority shareholder its mind.
in Yanbu with a mixed feed steam cracker and in Engie, stepped in last month to prevent the
derivative olefins units. The scope is being reas- company from agreeing a 20-year contract
sessed “to maximise the economic value while with US LNG developer NextDecade, Polit-
evaluating the optimal technical options and ico, Bloomberg and various other outlets have
market risks,” SABIC said in a filing. reported. According to Politico, the authorities’
The shift in plans comes as oversupplied main concern is the life cycle of the methane
oil and petrochemicals markets have forced content of US gas produced in West Texas and
operators in both areas to re-evaluate pro- New Mexico.
duction projects. It marks the first time the The gas was to come from NextDecade’s
crude-to-chemicals scheme has been adjusted planned Rio Grande terminal in Texas. Nex-
since the coronavirus (COVID-19) pandemic tDecade was hoping to take a final investment
started. decision (FID) on the first of the 27mn tonne per
Israel continues to increase ties with its Arab year (tpy) project’s several phases this year, but
neighbours in the energy sector. Israeli pipeline pushed the move back until 2021. It is looking to
firm EAPC on October 20 signed a preliminary finalise contracts for at least 11mn tpy of offtake
deal to bring UAE oil to Europe. The oil would before giving the venture the green light.
flow through a 254-km pipeline linking the Red The US government intends to get involved,
Sea city of Eilat with the Mediterranean port according to the news agency, with Secretary of
of Ashkelon. The agreement comes after Israel State Mike Pompeo leading a diplomatic push to
and the UAE normalised their relationship last convince France to change its mind.
month through a landmark peace deal. Meanwhile, Spain’s Repsol has become
Israeli-Arab relations have dramatically the latest in a number of European refiners to
changed in recent years, amid shared concerns announce plans to convert to biofuel produc-
about Iran and its efforts to expand Shia influ- tion. It plans to build an advanced biofuels plant
ence in the region. Tehran has also worsened ties at its 100,000 barrel per day (bpd) refinery in

Week 43 29•October•2020 www. NEWSBASE .com P13