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WEEKLY NEWSLETTER
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Saudi Arabia
Index
In addition to repairing damaged oil-refining facilities,
mainly Saudi Aramco's Ras Tanura refinery, the government has
ordered Samarec to undertake a US$5 billion program to upgrade
refineries. This five-year program will endeavor to transform its
relatively basic domestic refining system into a sophisticated
system designed to produce a cleaner, lighter series of products
featuring higher octane, lead-free gasoline. Although aimed
primarily at meeting a growing internal demand, this development
could position Saudi Arabia as a major exporter of gasoline by
the end of the 1990s. Moreover, Samarec's refineries are being
revamped to process more Arab Heavy crude oils, leaving a larger
proportion of Arab Light for export. Concentrating on the Riyadh,
Yanbu, and Jiddah refineries fully owned by Samarec, the first
phase of the project will cost US$1.7 billion. Later phases may
include upgrading the operation of the kingdom's most problemprone refinery at Rabigh. Two projects at the Petromin/Mobil
plant to produce methyl tertiary-butyl ether (MTBE), an additive
for unleaded gasoline, and an isomerization unit are also part of
the downstream capacity-upgrading plans.
Downstream plans overseas call for acquiring 2 million to 2.5
million bpd of refining and marketing capacity abroad. Combined
with current domestic refining capacity, such an expansion would
allow the kingdom to refine roughly half of its crude oil output.
In 1992 Saudi Aramco owned 50 percent of Star Enterprises, a
joint venture with Texaco, in the United States. Star Enterprises
operations included three refineries with combined refining
capacity of 615,000 bpd. The company planned to upgrade one of
the refineries at Port Arthur, Texas. It also had acquired
significant distribution facilities including 450 gas stations in
Florida. In Asia Saudi Aramco had taken a 33 percent share in
Ssangyong Oil Refining Company refinery in Onsan, South Korea,
giving the oil exporter approximately 175,000 bpd in refining
capacity for its exclusive use. Further downstream plans called
for expansion in Europe and Japan.
Data as of December 1992
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