Energy & Mining

Refine By Me

Oil Refining Capacity

The Kingdom's strategy of becoming a stronger global downstream player reached important milestones earlier in 2015, as the new YASREF refinery in Yanbu began exports in diesel, gasoline, and petcoke. Combined with the SATORP refinery in Jubail, which reached full capacity in mid-2014, Saudi Arabia added an impressive 800,000 bpd refining capacity in less than two years.

Embodying Saudi Arabia’s commitment to becoming a stronger downstream player, the new refinery in Yanbu—the Yanbu Aramco Sinopec Refining Company (YASREF)—recorded a series of milestones in 2015, including its first export shipment on January 15. The recently commissioned refinery is one of the key centerpieces of the larger Yanbu Industrial City, sitting on a 5.2 million sqm plot of land with processing capacity of 400,000 bpd of crude oil. Products from the refinery include 90,000 bpd of gasoline, 263,000 bpd of ultra-low sulfur diesel, 6,200 metric tons per day (mtd) of petcoke, 1,200 mtd of sulfur, and 140,000 mtd per year of benzene. Approximately 6,000 direct and indirect jobs have been created by the refinery.

Beyond acting as a significant contribution to Saudi Arabia’s downstream capacity, YASREF also solidifies the strategic partnership with Beijing-based China Petroleum and Chemical Corporation (Sinopec). Sinopec is a 37.5% shareholder in YASREF, and Saudi Aramco (62.5%) is already an investor in two other refineries in China with the company. Sinopec is Saudi Aramco’s largest current crude oil partner and buyer, and at over 10%, Saudi Arabia is also China’s top crude oil supplier. Further investment opportunities in the East Asian country figure to be a key part of Saudi Aramco’s future strategy.

Currently, YASREF is Saudi Arabia’s most advanced refinery, in terms of technical aspects and quality of products. Located on the Red Sea, it is also ideally situated to export to rising demands throughout the MENA region, to the rest of Asia beyond China, and new markets in Asia. Products from YASREF can and have also be sent to Europe—especially when east-west spreads are favorable, as they were in the initial months after the refinery began exporting—and even to the US, which has European traders and refiners closely monitoring the new Saudi refinery and its effects on the European market.

on January 15th, sending off 300,000 barrels of clean diesel from Yanbu Berth 72. Shortly after, the refinery loaded an additional 60,000 tons of gasoline on a Panamax tanker, destined for nearby Fujairah, UAE.

In April, YASREF again passed a new milestone by exporting its first shipment of petroleum coke, the high-energy/high-sulfur fuel that the refinery is able to produce due to its Arabian heavy crude. In total, the first shipment totaled 49,000 tons, leaving Yanbu port for India.

At over 10 billion bpd produced, higher even than the Kingdom’s 4Q2014 reported bpd, Saudi Arabia is hoping that its growing refining sector can domestically absorb more of its crude oil amid a time of lowering crude oil prices. YASREF added 400,000 bpd refining capacity, which is on top of an additional 400,000 bpd from the SATORP refinery in Jubail, which only reached full capacity as recently as mid-2014. SATORP is a joint venture between Saudi Aramco (62.5%) and France’s Total (37.5%).

Even with the 800,000 bpd additional refining capacity that has been added in just two years, Saudi Arabia and Saudi Aramco are pushing strongly forward with their downstream-centric strategy. According to a statement from May 2014, Aramco’s downstream investments would surpass $100 billion through the end of the next decade. Included in these projects is the Jizan Refinery, which is a roughly $6-7 billion, 400,000 bpd keystone project for the new Jizan Economic City.

According to some experts, Saudi Arabia could reach a production balance of 2:1 for refined products verses crude oil by as early as 2019.

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