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 as the Saudi oil giant prioritizes international investments, Bloomberg reported, citing people in the know.

The company is delaying the start of major engineering and design work on the facilities, the sources pointed out.

The deferrals are aimed at optimizing spending amid low oil prices and other more urgent demands for cash, they added.

The company is holding back two joint venture (JV) 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 for being more advanced, while also being located near in-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.

Ther is also a plan 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 and one in Korea alongside a JV with TotalEnergies SA in Saudi Arabia — all slated for kick-off within the next three years.

According to Argaam’s data, Saudi Aramco, China Petroleum & Chemical Corporation (Sinopec) and Yanbu Aramco Sinopec Refining Co. (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 feasbility of developing an integrated petrochemical complex in a local refinery at Yanbu Industrial City.