Aramco puts on hold 3 chemicals expansion projects: Report

Logo of Saudi Aramco, which is prioritizing investment in international refining and chemical facilities

Saudi Aramco has put three chemicals expansion projects on hold as weaker oil prices squeeze local spending and it prioritizes international investments, according to Bloomberg, citing people familiar with the situation.

The company is delaying the start of major engineering and design work on the facilities, according to people with knowledge of the situation, who asked not to be named because the information isn’t public.

The deferrals are aimed at spreading out spending at a time of low oil prices and other more immediate demands for cash, the sources said.

The company is holding back two joint venture projects at Yanbu on Saudi Arabia’s western Red Sea coast and another facility at Jubail on the Persian Gulf coast.

Aramco is prioritizing investment in international refining and chemical facilities, in part because those are more advanced, but also as they are located near big demand centers in China and South Korea, Bloomberg stated.

Aramco is also continuing to spend on oil and gas production projects, like the Jafurah natural gas field, which is set to begin output in a first phase later this year. The company plans to spend more than $50 billion this year, with the majority going to upstream projects in gas and for maintaining oil production capacity.

Aramco is working on four crude to chemicals projects — two in China , one in Korea and a venture with TotalEnergies SA in Saudi Arabia — that are set to start within the next three years.

According to Argaam’s data, Saudi Aramco, China Petroleum & Chemical Corporation (Sinopec) and Yanbu Aramco Sinopec Refining Company (Yasref) in April signed a venture framework agreement (VFA) intended to pave the way for a major petrochemical expansion at Yasref in Yanbu.

In December 2022, Saudi Basic Industries Corp. (SABIC) signed a memorandum of understanding with Saudi Aramco and Sinopec to explore the economic and technical visibility for developing an integrated petrochemical complex in a local refinery in Yanbu Industrial City.