Dhahran: More petrochemical projects will follow after Saudi Aramco agreed to join a $20 billion venture to convert crude oil to chemicals, the state oil company's chief executive told Reuters.
Aramco and Saudi Basic Industries Corp (SABIC) signed a preliminary deal on Sunday to build a petrochemicals complex with start-up seen in 2025.
Saudi Aramco has been looking to develop its downstream business as the government prepares to sell up to 5 per cent of the world’s largest oil company in an initial public offering (IPO) next year.
"It's a starting point, there will be others in the future as we develop our technologies to shift or turn more barrels of crude into chemicals," CEO Amin Nasser said in an interview after the signing.
"We are looking at chemicals as a very attractive market for diversification."
He said Aramco will soon start up piloting technologies that will potentially turn 70 or 80 per cent of the crude oil intake into chemicals as demand for petrochemicals is set to rise quicker than crude.
"Currently our crude is primarily or mostly utilised in the transportation sector followed by aviation, shipping and other sectors,” Nasser said.
"Demand in the petrochemicals sector is twice as much as the transport sector so for us it is very important as a strategy to look at other sectors and maximise the value of our resources such as converting crude directly into chemicals."
Asked whether expanding into petrochemicals and using more oil would mean that Aramco needs to raise its production capacity above the current 12 million barrels per day, Nasser said: "We don't see the need to expand it beyond that as we have ample spare capacity to accommodate this and other projects."
Plans to expand production at a few fields, such as Marjan, Zuluf, Berri, are all meant to maintain production capacity, he said. Nasser said the company was looking for investments in the gas sector abroad. He did not elaborate but said they are currently in discussions with different partners globally.