meed-logo

line1 line2 line3
SIGN IN / REGISTER

Petrochemicals ambitions define Saudi downstream

9 March 2023

 

Saudi Aramco began a gradual pivot towards petrochemicals in 2007 when it partnered with Dow Chemical Company to build the Sadara chemicals project in Saudi Arabia.

Aramco’s majority acquisition of Saudi Basic Industries Corporation (Sabic) in June 2020, however, marked the formal integration of the kingdom’s oil and gas and petrochemical industries.

Just a month after completing the $69.1bn transaction with the Public Investment Fund to acquire a 70 per cent stake in Sabic, Aramco announced a reorganisation of its downstream business to create four dedicated commercial units: fuels (including refining, trading, retail and lubricants); chemicals; power; and pipelines, distribution and terminals.

Since taking these two significant steps in 2020 to bring Sabic into its fold and reshuffle its downstream business to make it more efficient and profitable, Aramco has sanctioned significant capex allocation to increasing petrochemicals production and broadening its products portfolio.

So much so that the volume of Saudi petrochemical projects in different pre-execution stages, valued at $36bn according to MEED Projects, dwarfs the pipeline of oil refining and gas processing projects.

Aramco/Sabic is currently overseeing progress on at least three mega petrochemical projects in the kingdom.

Amiral petrochemicals scheme

Saudi Aramco and Total Refining & Petrochemical Company (Satorp) is moving closer to awarding the main engineering, procurement and construction (EPC) contracts for its estimated $7bn Amiral petrochemicals project in Jubail, Saudi Arabia.

The lowest bidders have emerged for the four main EPC packages of the project, which represents the expansion of Satorp’s crude oil refining operations in Jubail into petrochemicals production.

Satorp’s petrochemicals complex, which will be the centrepiece of the Amiral development, will feature the Middle East’s largest mixed-feed cracker, processing 50 per cent ethane and refinery off-gases and with the capacity to produce 1.5 million tonnes a year (t/y) of ethylene, 500,000 t/y of propylene and related high-added-value derivative products.

The Amiral petrochemicals facility, which has recently been chosen to receive support from the Saudi government’s Shareek programme, will be integrated with Satorp’s existing 440,000 barrel-a-day (b/d) capacity refinery in Jubail to give the upcoming complex competitive feedstock advantage.

Satorp and the Royal Commission for Jubail & Yanbu are calling on third-party investors to commit up to $4bn to build chemicals plants that will derive feedstock from the main Amiral complex.

Aramco slated to escalate upstream spending

Integrated Yanbu project

Sabic recently confirmed progress with another project to build an integrated refinery and petrochemicals project in Yanbu, on Saudi Arabia’s Red Sea coast.

Sabic and its parent company Aramco signed a memorandum of understanding (MoU) with China Petroleum and Chemical Corporation (Sinopec) in December for the Chinese chemicals company to partner in the planned petrochemicals project in Yanbu.

The aim of the MoU, signed on 15 December, is for the partners “to study the economic and technical feasibility of developing a new petrochemical complex to be integrated with an existing refinery in Yanbu, Saudi Arabia”, Aramco stated.

MEED understands that the MoU relates to a partnership for the planned Integrated Yanbu Project (IYP). The proposed project calls for integrating the Yanbu Aramco Sinopec Refinery Company’s (Yasref) existing refinery facility with a greenfield petrochemical-producing facility in Yanbu.

The petrochemicals unit will draw crude oil derivatives such as naphtha as feedstock from the Yasref refinery to process into chemicals.

Crude oil-to-chemicals complex

Sabic recently also announced the start of a feasibility study and initial engineering work to establish a large-scale complex that will convert crude oil and liquids into petrochemicals in Ras al-Khair, Saudi Arabia.

The planned complex has the capacity to convert 400,000 b/d of oil directly into chemicals.

Sabic said it would “announce progress on the [oil-to-chemicals] project in the next few years”, without providing other details, such as if it had appointed a consultant for the feasibility study on the project.

The petrochemicals giant announced in November last year that it was due to start the feasibility study into the proposed project in Ras al-Khair, located in the kingdom’s Eastern Province.

The plan to build an oil-to-chemicals facility in Ras al-Khair, instead of the previously selected location of Yanbu, is the latest move by Sabic over the past five years or so to establish such a project.

Sabic’s ambition to build a large-scale facility that converts crude oil and liquids directly into petrochemicals has faced obstacles in the past, mainly due to its capital-intensive nature and technological challenges.

Downstream oil and gas

These huge petrochemical projects aside, Aramco continues to advance projects not just to boost the throughput of its refineries and gas processing plants but also to improve its environmental credentials, in line with its net-zero carbon emissions by 2050 pledge.

Last year, Aramco awarded EPC contracts for a pair of projects to modify sulphur recovery units (SRUs) at its Riyadh and Ras Tanura refineries. French contractor Technip Energies secured the Riyadh refinery desulphurisation contract, which could be worth up to $250m.

Egypt-headquartered Engineering for the Petroleum & Process Industries (Enppi) won the main contract for the Ras Tanura refinery in Saudi Arabia’s Eastern Province, estimated to be worth $300m-$400m.

The Saudi energy giant is now moving ahead with a major desulphurisation programme to modify SRUs at its key gas processing plants in the kingdom.

Aramco expects third-party investments of up to $2bn in the desulphurisation programme, which entails building a large downstream tail-gas treatment (TGT) facility to collect and process tail gas discharged from SRUs at identified gas plants.

The facilities will be developed on a build-own-operate-transfer basis, making it one of Aramco’s initial public-private partnership exercises in its main oil and gas business. Investors are preparing proposals for the scheme, which are due by the end of March.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10659745/main.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • LNG goals galvanise Oman’s oil and gas sector

    3 December 2025

     

    The Omani oil and gas sector, where large-scale, capital-intensive project investments are relatively rare, has been bolstered by progress on two major liquefied natural gas (LNG) developments.

    The government made headlines in July last year when it announced that majority state-owned Oman LNG would build a fourth train at its Qalhat LNG production complex in Sur.

    The new LNG train will have an output capacity of 3.8 million tonnes a year (t/y), increasing Oman LNG’s total capacity to 15.2 million t/y when it is commissioned in 2029.

    Oman LNG has recently made key progress on the expansion project, having shortlisted three bidders for the main engineering, procurement and construction (EPC) contract: a consortium of Chiyoda and South Korea’s Samsung C&T; Japanese contractor JGC Corporation; and a consortium comprising Italy’s Saipem and South Korea’s Daewoo Engineering & Construction.

    Technical and commercial bids are due in February and March 2026, respectively. The EPC tender process began less than a year after Oman LNG awarded the front-end engineering and design (feed) contract to US-based consultancy KBR.

    Separately, France’s TotalEnergies is studying a potential expansion of its Marsa LNG bunkering and export terminal in Oman. The move is significant, given that the first phase of the project is currently under construction in the sultanate’s northern industrial city of Sohar and will have an output capacity of 1 million t/y.

    TotalEnergies reportedly began an initial study on a potential second phase earlier this year. The French energy major may consider doubling the LNG complex’s capacity, although the plan has yet to be confirmed, according to sources.

    Earlier in the year, TotalEnergies appointed Technip Energies – already the main EPC contractor on the under-construction Marsa LNG terminal – to perform concept and feasibility studies on the proposed expansion phase.

    With Oman LNG advancing its fourth train and TotalEnergies assessing a potential doubling of LNG output, the sultanate is positioning itself to become a major global LNG player by 2030.

    Upstream pursuits

    Petroleum Development Oman (PDO), meanwhile, continues to advance projects aimed at maintaining and enhancing the sultanate’s oil and gas production capacity.

    PDO operates Block 6, Oman’s largest and most prolific hydrocarbons concession, spanning 75,119 square kilometres onshore and containing 202 oil fields and 43 gas fields.

    The government holds a 60% stake in PDO, with the remaining shares held by UK-based Shell (34%), France’s TotalEnergies (4%) and Thailand’s PTTEP (2%).

    In September, PDO awarded the main contract for an integrated project to produce natural gas from the Budour and Tayseer fields. The project aims to expand the capacity of existing gas production and processing facilities at Tayseer as part of the field’s second development phase. PDO will also appraise, produce and process sweet gas from the Budour field, located about 50 kilometres west of Tayseer.

    Kuwait-based Spetco International Petroleum Company won the design, build, own, operate and maintain (DBOOM) contract for the combined Budour-Tayseer sour gas processing facility.

    PDO has also launched a solicitation of interest with contractors for feed work on the second phase of a project to increase oil production from the Rabab Harweel field in Oman’s southernmost Dhofar Governorate.

    PDO began production from the asset in 2019 following completion of the estimated $3bn Rabab Harweel Integrated Project (RHIP), on which UK-based Petrofac carried out the EPC works.

    The second tranche of the RHIP is an enhanced oil recovery project that involves raising miscible gas injection in additional reservoirs across several smaller fields within the wider development. Scheduled to come on-stream beginning in 2028, tranche two aims to expand oil production capacity and improve gas injection by utilising ullage at the existing Harweel Main Production Station (HMPS).

    The scope also includes sustaining condensate and gas supply by using ullage from the first phase of RHIP, installing a depletion compression facility by 2030, and expanding the off-plot gas supply network.

    According to the request for information document, PDO has yet to decide on the project execution model, with the majority state-owned company considering a feed-to-EPC approach. The scope of work on the RHIP tranche two project is primarily divided into an oil and a gas scope.

    Separately, PDO has begun prequalification for EPC works to develop key on-plot facilities as part of the early phase development of the Dhulaima onshore field.

    The Dhulaima Upper Shuaiba field, located in the Lekhwair cluster within Block 6, will be developed under an operations lease contract with a duration of five years.

    The project’s scope covers EPC activities and all associated civil, mechanical, piping, electrical, fabrication, instrumentation, control, testing, pre-commissioning, commissioning and de-commissioning works.

    PDO has also launched a prequalification exercise for a considerable scheme to appoint one or more contractors to build early production facilities for new appraisal exploration fields, enabling accelerated production and early monetisation.

    Boosting the energy value chain

    State energy conglomerate OQ Group is moving ahead with initiatives to expand natural gas liquids (NGL) production capacity, in line with trends across the Gulf’s national oil companies.

    OQ has launched prequalification for feed works on a project to build an NGL extraction facility in Saih Nihayda in central Oman, which will send condensates to Duqm for fractionation and export.

    Separately, Oman Tank Terminal Company (OTTCO), an OQ subsidiary, and Netherlands-based Royal Vopak signed a shareholder agreement in November to establish a new company in the Special Economic Zone at Duqm (Sezad).

    OTTCO will hold a 51% stake and Vopak the remaining 49%, with the new company set to develop and operate world-class energy storage and terminal infrastructure at Duqm.

    In addition, Energy Development Oman (EDO) has entered into a joint venture with Japan’s Sumitomo Corporation to establish a supply chain management company in the sultanate.

    The entity – set to be the first of its kind in Oman – will be based in Duqm, located in Al-Wusta Governorate on the sultanate’s geopolitically strategic Indian Ocean coast.

    The new company aims to provide supply chain management services to Oman’s energy sector, beginning with oil country tubular goods and later expanding to other products and services across the hydrocarbons value chain, renewables and other energy segments.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15196318/main.gif
    Indrajit Sen
  • Oman prepares for wave of IPP awards

    3 December 2025

     

    Contract activity in Oman’s power sector slowed in 2025, yet the sultanate is entering the new year with its diversification plans advancing and procurement for independent power projects (IPPs) gathering pace.

    In the renewables segment, progress continued in September with the award of the sultanate’s fourth large-scale solar IPP. The 500MW Ibri 3 solar IPP was awarded to a consortium of Abu Dhabi Future Energy Company (Masdar), Korea Midland Power and local firms Al-Khadra Partners and OQ Alternative Energy.

    The project also incorporates a 100MWh battery system, making it Oman’s first utility-scale solar-and-storage development.

    Ibri 3 accounted for almost 60% of the power contract awards in 2025. While this reflects a quieter year for investment, it also highlights the transition taking place in the market, with attention shifting towards grid reinforcement and preparations for a series of IPPs expected to advance over the coming period.

    The inauguration of the 500MW Manah 1 and Manah 2 solar IPPs earlier in the year added further capacity, building on the operational Ibri 2 plant, which came online in 2021.

    Wind procurement also continues to advance. In November, Nama Power & Water Procurement Company (Nama PWP) signed a 20-year power purchase agreement with a joint venture of Singapore’s Sembcorp Utilities and OQ Alternative Energy for the Dhofar 2 wind IPP.

    The 125MW plant is scheduled to begin operations in the third quarter of 2027 and will add capacity to the Dhofar Power System (DPS), where Oman’s first commercial wind farm, the 50MW Dhofar project, already operates.

    In the DPS, peak demand is anticipated to grow by 5% a year, from 612MW in 2022 to 837MW in 2029. The Sadah wind IPP, which will add around 99MW to the system once operational, is expected to move forward in the coming months.

    Overall, the direction of the sector remains aligned with national plans to increase renewable energy’s share of electricity generation to 30% by 2030 and expand steadily thereafter.

    Oman’s renewable energy programme is expected to expand considerably by 2030, with about 4.5GW of solar IPPs and around 1GW of wind farms planned across multiple sites.

    Increasing wind power

    The wider wind programme includes the Duqm and Mahoot wind IPPs, which are moving forward and will have a combined generation capacity of more than 600MW. In October, Nama PWP issued a supervisory consultancy services tender for the Duqm project.

    Several awards are expected in the near term. Jalan Bani Bu Ali, a wind IPP of about 100MW, and the 280MW Al-Kamil Wal Wafi solar photovoltaic IPP are among four IPPs currently under bid evaluation.

    While Oman continues to scale up renewable capacity, the need for firm generation remains. Peak demand in Oman’s Main Interconnection System (MIS) is expected to grow at an average of 3.4% a year over the current planning period, reaching about 8,350MW in 2029, up from 6,628MW in 2022. 

    Demand in the MIS is likely to continue rising through the decade, supported by industrial growth, population increases and development in economic zones such as Duqm.

    Nama PWP aims to meet this requirement with two major thermal schemes: the $1.53bn gas-fired Misfah IPP and the $753m Duqm IPP. The state offtaker has received three bids for the development and operation of the plants, which together will supply 2,400MW and are scheduled to begin delivering early power by April 2028.

    Developing the grid

    Similar to previous planning cycles, grid development remains a priority. In September, the GCC Interconnection Authority signed a $500m interim financing agreement with Sohar International Bank to support the development of the direct Oman-GCC electricity interconnection.

    The project involves constructing a 400-kilovolt double-circuit line stretching approximately 530km between the Al-Sila station in the UAE and a new Ibra substation in Oman.

    Once completed, the link will enhance regional power exchange capability, improve reserve margins and support the integration of intermittent renewable power.

    These regional works complement domestic transmission upgrades, including the continued expansion of the Rabt North-South Interconnection. The first phase, completed in 2023, connected the MIS with the Duqm Power System.

    Construction works are ongoing on the second phase, which is expected to reinforce the 400kV backbone southwards toward Dhofar.

    New technologies are also emerging in Oman’s power programme. Ibri 3 represents the first deployment of utility-scale battery storage in the sultanate, setting a precedent for integrating storage with future renewable projects. 

    In parallel, Nama PWP and Oman Environmental Services Holding Company (Beah) are preparing to tender the main contract for a 100MW waste-to-energy (WTE) project in Barka.

    Estimated to cost almost $1bn, the scheme would be Oman’s first major WTE facility and reflects broader efforts to embed circular-economy principles into the national infrastructure programme.

    Water sector

    The water sector recorded a solid year, with about $1bn in contract awards, although activity remained below 2024 levels.

    In March, China National Electric Engineering Corporation (CNEEC) won the main contract for a $200m deep-sea desalination project, heading a list of smaller wastewater and transmission packages awarded across 2025.

    Following the commissioning of the Barka 5 independent water project (IWP) and continued construction on the Ghubrah 3 IWP, planning attention has shifted to the next cycle of capacity.

    The next major scheme expected to move forward is a $150m desalination plant in Dhofar, with a planned capacity of 22 million imperial gallons a day.

    Rising water demand in Sharqiyah and Dhofar continues to guide long-term planning with more than $800m-worth of water transmission and treatment schemes set to be awarded in the near to medium terms.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15196122/main.gif
    Mark Dowdall
  • Local contractor wins Saudi substation deal

    3 December 2025

    Saudi Arabia-based Nesma Infrastructure & Technology has signed a contract with state-owned utility Saudi Electricity Company (SEC) to replace the Jubail Southeast 230/115/34.5kV substation.

    The project includes overhead transmission line (OHTL) works and is valued at more than SR840m ($224m). It is scheduled to be delivered within 20 months.

    The award forms part of SEC’s ongoing programme to upgrade ageing substations and reinforce network capacity in the Jubail industrial area.

    In September, local contractor Al-Fanar Projects was appointed to replace the Jubail Southwest 230/115KV substation, one of several transmission assets in the region undergoing phased renewal.

    As MEED recently reported, SEC has plans to invest SR220bn ($58.7bn) in power projects by 2030. This includes SR135bn ($36bn) and SR85bn ($22.7bn) for transmission and distribution, respectively.

    According to the utility, its planned upgrades will cover 130 high-voltage substations, 135,000 MVA of capacity, 12,900 kilometres of overhead transmission lines and 1,100km of underground cables.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15195824/main.jpg
    Mark Dowdall
  • SEC signs $347m power works deal for Soudah Peaks

    3 December 2025

    Register for MEED’s 14-day trial access 

    Saudi Electricity Company (SEC) has announced that its transmission subsidiary, National Grid, has signed a SR1.3bn ($347m) agreement with Soudah Development to deliver the electrical infrastructure for Saudi Arabia’s Soudah Peaks project.

    Soudah Peaks is a major high-altitude tourism and real estate development in the Asir mountains, led by Soudah Development, a wholly owned Public Investment Fund (PIF) company.

    The $7.7bn project includes hotels, resorts, residential units, entertainment facilities and outdoor activity zones at elevations of up to 3,000 metres. It will be developed over three phases, with full completion scheduled for 2033.

    Under the agreement, National Grid will develop a full integrated electrical network to support the project’s phased construction.

    The scope includes a central 380/132kV transmission substation with a capacity of 500MVA and two 13.8/132kV substations. The company will also build the electrical interconnection needed to supply all stages of the development.

    The first phase of the initiative will see the development of 454 residential units, 1,010 hotel keys and retail space with a gross leasable area of 20,625 square metres by 2027.

    The overall project includes the development of six main areas: Red Rock Mountain, Tahlal gateway to Soudah Peaks, Sahab, Sabrah, Jareen and Rijal.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15194632/main.jpg
    Mark Dowdall
  • Jeddah Economic Company appoints new CEO

    3 December 2025

    Register for MEED’s 14-day trial access 

    Jeddah Economic Company (JEC), the developer of the world’s tallest tower project, has appointed Fabian Toscano as its new CEO.

    In an official statement, JEC said: “Toscano will lead the next phase of development for Jeddah Economic City and the Jeddah Tower. His focus will include accelerating development activity, strengthening global collaborations, and shaping a world-class destination aligned with the ambitions of Saudi Vision 2030.”

    Toscano has previously served as the CEO of AlUla Development Company.

    Last year, JEC signed an estimated SR8bn, 42-month contract with SBG to resume construction work on the tower. SBG then began engaging with the supply chain to work on the project. SBG awarded Beijing-headquartered Jangho Group a facade works contract that involves engineering design and technical services for the project’s structural glass and adhesive curtain walls. 

    At the time, Jeddah Tower’s superstructure was about one-third complete, with 63 floors out of a total 157. SBG was the main contractor on the project in the early and mid-2010s. Germany’s Bauer completed the tower’s piling work.

    The architect is US-based Adrian Smith & Gordon Gill, and the engineering consultant is Lebanon’s Dar Al-Handasah (Shair & Partners).

    Jeddah Tower is the centrepiece of the Jeddah Economic City development. The project’s first phase, which includes the main tower, covers an area of 1.5 million square metres.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15194477/main.gif
    Yasir Iqbal