DUBAI, (Reuters) – State oil company Saudi Aramco’s new 400,000 barrel per day (bpd) refinery at Ras Tanura will supply the rapidly growing domestic fuel market, an Aramco spokesman said on Sunday.
“The refinery will provide for domestic fuel consumption, similar to existing in-Kingdom wholly owned Saudi Aramco refineries,” the spokesman said.
Last year, Aramco agreed with France’s Total and U.S. ConocoPhillips to build two export-oriented refineries in the kingdom of 400,000 bpd each.
The spokesman was unable to say if the new refinery would be wholly owned by Aramco or if foreign or domestic companies would be offered a stake.
Saudi Arabia’s fuel consumption is rising rapidly as the economy expands on the back of record revenues from crude exports. The world’s largest oil exporter’s nominal GDP has roughly doubled in size since 2001, while oil prices have more than tripled.
Saudi domestic fuel demand rose over 6 percent last year to 2.005 million bpd, according to BP’s latest annual statistical review.
Saudi Arabia has five wholly owned domestic refineries and a 50 percent stake in two more that give it domestic processing capacity of 2.098 million bpd. Saudi Aramco’s share of that capacity is 1.746 million bpd.
Including the facility at Ras Tanura, Aramco plans four new refineries and upgrades at existing plants that would take the kingdom’s capacity to around 3.8 million bpd.
Saudi Arabia has moved quickly to show it is determined to tackle a worldwide refining crunch that played a part in the 10-month high in oil prices on Friday and the record prices of last summer. London Brent crude touched $71.88 a barrel on Friday, its highest since August 2006.
Aramco has yet to find a partner for the other new refinery with capacity of 250,000 to 400,000 bpd to be built in its western Jizan province.