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Saudi Arabia
Downstream Development Plans
In addition to repairing damaged oil-refining facilities, mainly
Saudi Aramco's Ras Tanura refinery, the government has ordered
Samarec to undertake a US$5 billion program to upgrade refineries.
This five-year program will endeavor to transform its relatively
basic domestic refining system into a sophisticated system designed
to produce a cleaner, lighter series of products featuring higher
octane, lead-free gasoline. Although aimed primarily at meeting
a growing internal demand, this development could position Saudi
Arabia as a major exporter of gasoline by the end of the 1990s.
Moreover, Samarec's refineries are being revamped to process more
Arab Heavy crude oils, leaving a larger proportion of Arab Light
for export. Concentrating on the Riyadh, Yanbu, and Jiddah refineries
fully owned by Samarec, the first phase of the project will cost
US$1.7 billion. Later phases may include upgrading the operation
of the kingdom's most problemprone refinery at Rabigh. Two projects
at the Petromin/Mobil plant to produce methyl tertiary-butyl ether
(MTBE), an additive for unleaded gasoline, and an isomerization
unit are also part of the downstream capacity-upgrading plans.
Downstream plans overseas call for acquiring 2 million to 2.5
million bpd of refining and marketing capacity abroad. Combined
with current domestic refining capacity, such an expansion would
allow the kingdom to refine roughly half of its crude oil output.
In 1992 Saudi Aramco owned 50 percent of Star Enterprises, a joint
venture with Texaco, in the United States. Star Enterprises operations
included three refineries with combined refining capacity of 615,000
bpd. The company planned to upgrade one of the refineries at Port
Arthur, Texas. It also had acquired significant distribution facilities
including 450 gas stations in Florida. In Asia Saudi Aramco had
taken a 33 percent share in Ssangyong Oil Refining Company refinery
in Onsan, South Korea, giving the oil exporter approximately 175,000
bpd in refining capacity for its exclusive use. Further downstream
plans called for expansion in Europe and Japan.
Data as of December 1992
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