Saudi Aramco Stakes More than $400 Billion Over 10 Years on Ending 'Oil Addiction'

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Researched by Industrial Info Resources (Sugar Land, Texas)--Saudi Aramco, one of the biggest players in the history of the oil business, is turning away from oil--or at least acknowledging that it can no longer depend on black gold to maintain a global business empire. On Tuesday, executives said the state-owned company plans to invest more than $40 billion a year in projects over the next decade, a 25% increase from what was announced last year--with a significant chunk set aside for renewables projects, oil-to-chemicals facilities, and other new avenues for the company.

Industrial Info is tracking $66 billion in active projects involving Aramco, more than $27.4 billion of which are under construction. Earlier this year, Aramco completed construction on its Sadara Chemical complex in Jubail, Saudi Arabia, an estimated $20 billion undertaking that is believed to be the world's largest chemicals facility built in a single phase. The project was a key element of Deputy Crown Prince Mohammed bin Salman's "Vision 2030" agenda, an ambitious overhaul of Saudi Arabia's economy that the 32-year-old reformer says is essential to keeping his country globally competitive.

More than $6.8 billion in active and unconfirmed Aramco projects in the Chemical Processing Industry can be found in Industrial Info's project database, including a series of additions to the Rabigh Petrochemical Complex in Makkah. These include a paraxylene unit that is expected to produce 850,000 metric tons per year; a low-density polyethylene (LDPE) unit that is expected to produce 265 million pounds per year; a benezene unit that is expected to produce 92.5 million gallons per year; a cumene unit that is expected to produce 771.6 million pounds per year; a phenol unit that is expected to produce about 551.2 million pounds per year; and more than a dozen other additions.

The complex is owned by Rabigh Refining & Petrochemical Company (Petro Rabigh), a publicly traded joint venture between Aramco and Sumitomo Chemical Company Limited (Tokyo, Japan). Each unit began construction in mid-2013 (except the LDPE unit, which began in October 2013) and is set to be fully completed in the first quarter of 2018; some units already have begun production. For more information, see Industrial Info's project reports on the paraxylene, LDPE, benezene, cumene and phenol units.

"Vision 2030" includes the sale of up to 5% of Aramco in an initial public offering (IPO) next year. The oil & gas giant also has set aside part of its business to develop wind and solar projects, and last month signed a preliminary deal with petrochemical producer Saudi Basic Industries Corporation (SABIC) to build a $20 billion complex to convert crude oil to chemicals, according to Reuters.

Aramco also plans to nearly double its gas production to 23 billion standard cubic feet per day over the next decade. Aramco Chairman Khalid al-Falih said last year that the company would consider importing natural gas as part of its energy diversification, and earlier this month U.S. Energy Secretary Rick Perry talked with Saudi officials about possible imports of U.S.-derived liquefied natural gas (LNG), according to Reuters. At least two natural gas-processing projects are under construction near Saudi Arabia's most populated areas: the $5 billion Fadhili plant in Dhahran and the $750 million expansion of the Khurais plant east of Riyadh.

The Fadhili project is expected to feature five trains that will process 2.5 billion standard cubic feet per day of gas from nearby fields, while the additions at Khurais are expected to handle 300,000 barrels per day (BBL/d) of crude, 143 million standard cubic feet per day of gas and 34,000 BBL/d of condensates. For more information, see Industrial Info's reports on the Fadhili and Khurais projects.

Aramco also is nearing completion on the $1.6 billion expansion of its Master Gas Pipeline system, which spans the country, bringing natural gas to the westernmost regions. The 500-kilometer addition is expected to increase capacity from 8.4 billion to 9.6 billion cubic feet per day; an $827 million second phase, under construction and currently set to be completed in 2021, would run more than 400 kilometers and boost capacity to 12.8 billion cubic feet per day. For more information, see Industrial Info's project reports on Phase I and Phase II.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.