French oil and gas major Total S.A. has signed a deal with state oil giant Saudi Aramco to expand their joint venture refinery in Saudi Arabia.
A massive petrochemical complex will be integrated downstream of their existing SATORP (Saudi Aramco Total Refining and Petrochemical Company) export refinery in Jubail. The two companies formed the SATORP venture in 2008, and the refinery went online in 2014, increasing its capacity from 400,000 barrel-per-day at its start-up to 440,000 barrel-per-day today. Saudi Aramco holds a 62.5% stake in the refinery, while Total holds the remaining 37.5%.
“The agreement deepens the exemplary relationship enjoyed by our two companies over many decades”, said Amin H. Nasser, President and CEO of Saudi Aramco. “Our joint venture SATORP is a remarkably successful model of industry partnership and we are keen to build on this success to further underpin Saudi Aramco’s strategy to expand its capacity in the chemicals sector by 2030.”
According to a statement from Total, the project will represent an investment of $5 billion, and create 8,000 jobs. The partners plan to start front-end engineering and design in the third quarter of 2018. The new complex will be comprised of a mixed-feed steam cracker with a capacity of 1.5 million tons per year of ethylene and related high-value petrochemical units, Reuters reports. It will feed other petrochemical and specialty chemical plants, representing a $4 billion investment by third party investors, for a total investment of $9 billion.
“This project illustrates our strategy of maximizing the integration of our large refining and petrochemical platforms and of expanding our petrochemical operations from low-cost feedstock, to take advantage of the fast-growing Asian polymer market”, said Total’s Chief Executive Patrick Pouyanné. “Furthermore, this project will enable us to strengthen our ties with Saudi Aramco, with whom we successfully operate our biggest and most efficient refinery in the world.”
Total, the world’s 4th-ranked international oil and gas company, has been expanding through acquisitions and strategic partnerships. In March, it formed a partnership with the Supreme Petroleum Council of the Emirate of Abu Dhabi and Abu Dhabi National Oil Company.