Saudis see oil bonanza along US Gulf Coast
houston — Saudi Arabia signalled its intent to expand chemical production along the US Gulf Coast and potentially double the size of North America’s biggest oil refinery.
The kingdom’s state-owned crude producer is joining with UK oilfield-services firm TechnipFMC to assess the potential for producing ethylene, a key component in plastics, Saudi Aramco’s Motiva Enterprises unit said in a statement.
A second accord with Honeywell International could lead to the construction of a new manufacturing complex in the heart of the US petrochemicals industry.
In a separate presentation at a lavish reception for Saudi Crown Prince Mohammed bin Salman in Houston, Motiva said it’s considering doubling the size of its refinery in Port Arthur, Texas.
The announcement comes less than a year after Aramco paid $2.2 billion to Royal Dutch Shell to gain sole control of the Port Arthur plant and some other Motiva assets the 2 companies controlled as part of a joint venture.
No formal investment decisions on the chemical projects are expected until 2019, according to Motiva’s statement. Still, the kingdom has already hired longtime Dow Chemical CEO Andrew N. Liveris to act as an adviser after he departs the Dow DuPont unit on July 1, Saudi Basic Industries Corp CEO Yousef Al Benyan said in an interview in Texas.
Vision 2030
“These agreements signal our plans for expansion into petrochemicals,” Motiva CEO Brian Coffman said in the statement. “We are excited to work more closely with these leaders in the industry to further assess our opportunities for investment.”
Bin Salman, heir to the throne of the world’s largest oil exporter, is wrapping up a 3-week tour of the US to promote his effort to open up the Saudi economy through his ‘Vision 2030’ plan.
Saudi Basic, the Middle East’s dominant chemical maker, said on Saturday that it wants to build a Houston headquarters for its Western Hemisphere operations as the company capitalises on the surge in cheap natural gas supplies from North American shale fields.
In a late March stop in New York, the prince signed a memorandum of understanding with Softbank Group Corp to build a $200 billion solar power development. Moving downstream Investments in the US were announced as Aramco plans an initial public offering for as soon as the second half of this year. Proceeds from the share sale should be used to expand the company’s footprint in refining and petrochemicals, rather than in oil exploration and production, Aramco CEO Amin Nasser said in a March 26 Bloomberg television interview in New York.
Nasser also said Aramco is looking at a two- to three-fold expansion of its petrochemicals business from a “huge” global capacity, now that the Sadara joint venture with Dow Chemical is complete.
Total, the French energy major, and Aramco are due to sign a nonbinding agreement on April 10 to develop the petrochemical site at their refinery in Al Jubail, a person familiar with the matter said April 6. — Bloomberg