Oil and Gas

Aramco to integrate petrochems into United States’ biggest refinery


Saudi Aramco took the first steps to integratin­g a petrochemi­cals business into the United States’ biggest oil refinery, which is operated by its subsidiary Motiva Enterprise­s. Aramco’s Chief Executive Amin Nasser signed memoranda of understand­ing (MoUs) worth $8 billion-$10 billion with Honeywell UOP (HON.N) and Technip FMC (FTI.N) to study petrochemi­cal production technology for use in a chemical plant the company is considerin­g building at the Port Arthur refinery.

Saudi Arabia’s Crown Prince Mohammed bin Salman, who was winding up a two-week visit to the United States, was present at the signing in Houston, Texas, along with Saudi Energy Minister Khalid al-Falih and U.S. Energy Secretary Rick Perry. “These agreements signal our plans for expansion into petrochemi­cals,” Motiva’s Chief Executive Brian Coffman said. Aramco, which wants to develop its downstream business as the government prepares to sell up to 5 percent of the world’s largest oil firm in an initial public offering (IPO) this year, wants to use oil as a major petrochemi­cals feedstock. Coffman also said Motiva was evaluating boosting the 603,000 barrel-per-day (bpd) Port Arthur refinery’s capacity to 1 million or 1.5 million bpd, which would make it the largest in the world.

The aromatics unit for which Honeywell UOP’s technology is being considered under one of the MoUs, would convert benzene and paraxylene, byproducts of gasoline production, into 2 million tons annually of feedstocks for chemicals and plastics. “That’s something we’re evaluating, we’re studying for in the future,” he said. The 1.2-million bpd Reliance Industries (RELI.NS) refinery in Jamnagar, India, has the world’s largest crude oil processing capacity.

Aramco said last year that it would invest $18 billion in Motiva to expand the refinery and move into petrochemi­cal production. Other U.S. companies, including Chevron Phillips Chemical Co CHEPH.UL – a joint venture of Chevron Corp (CVX.N) and Phillips 66 (PSX.N) – and Exxon Mobil Corp (XOM.N), have recently opened plants, like the one Motiva is considerin­g, to process ethane into ethylene. Chevron Phillips is considerin­g building a second ethane cracker on the Gulf Coast of Texas.

The price tag for a large ethane cracker is typically over $6 billion, according to analysts. In addition to taking refining byproducts, ethane crackers provide hydrogen for refineries to use in making motor fuels.

 ??  ??

Newspapers in English

Newspapers from Oman