Aramco’s recalibrated chemicals goals reflect realism
26 March 2025
Saudi Aramco told consultants and contractors last year that it was revisiting its investment strategy and execution approach for its liquids-to-chemicals programme.
The central ambition of the strategic programme is to derive greater economic value from every barrel of crude produced in Saudi Arabia by converting 4 million barrels a day (b/d) of Aramco’s oil production into high-value petrochemicals and chemicals feedstocks by 2030.
Aramco and its subsidiary, Saudi Basic Industries Corporation (Sabic), had been tasked with establishing 10-11 large mixed-feed crackers by 2030. These petrochemicals crackers, which included greenfield developments and expansions of existing facilities, were to be built both in Saudi Arabia and in overseas markets.
Achieving this ambition required Aramco and Sabic – the main stakeholders in the liquids-to-chemicals programme – to invest a sum of up to $100bn. Amid considerable cost pressures and significant overcapacity in the global chemicals sector, pushing forward with such a capital-intensive campaign was hard to justify.
However, while Aramco may have streamlined the programme’s remit, the primary goal of attaining a liquids-to-chemicals conversion rate of 4 million b/d within its global portfolio remains unchanged.
In a presentation detailing Aramco’s financial performance and operational activities in 2024, president and CEO Amin Nasser stated that the company had achieved 45% of the target of the liquids-to-chemicals programme as of the end of last year. Also, 53% of Aramco’s crude oil production is utilised by the downstream sector.
This has been achieved through “greater capital efficiency with low-equity and a high-placement strategy”, Nasser said in the presentation.
Moreover, large-scale petrochemicals projects undertaken by Aramco’s joint ventures with foreign partners in South Korea and Saudi Arabia, namely the Shaheen and Amiral developments, respectively, will significantly contribute to the liquids-to-chemicals target when they come online in 2026 and 2027.
Key chemical projects advance
Aramco continues to make progress with projects deemed crucial to its long-term petrochemicals objectives. One such project is the expansion of Aramco affiliate, Saudi Aramco Jubail Refinery Company (Sasref), into the petrochemicals sector.
Aramco has brought China-based Rongsheng Petrochemical Company on board as a joint-venture partner for the proposed project, which is part of the liquids-to-chemicals programme.
Their aim is to convert the Sasref refining complex in Jubail into an integrated refinery and petrochemicals complex by adding a mixed-feed cracker. The project also involves building an ethane cracker that will draw feedstock from the Sasref refinery.
The project is in the pre-front-end engineering and design (pre-feed) stage, with Aramco previously saying that the construction of large-scale steam crackers and the integration of associated downstream derivatives into the existing Sasref complex would enhance “its ability to meet growing demand for high-quality petrochemical products”.
Meanwhile, Sabic is in the bid evaluation stage with a major project that involves building an integrated blue ammonia and urea manufacturing complex at the existing facility of its affiliate, Sabic Agri-Nutrients Company, in Jubail.
The estimated $3bn project, called the low-carbon hydrogen San 6 complex, is part of Sabic’s Horizon-I low-carbon hydrogen (LCH) programme. Contractors submitted bids for the project in March last year.
The San 6 complex will have an output capacity of 3,500 metric tonnes a day, or 1.17 million tonnes a year (t/y), of blue ammonia, and a urea production capacity of 3,850 metric tonnes a day, or 1.28 million t/y.
Carbon dioxide (CO2) from the blue ammonia plant will be utilised for urea production, with surplus CO2 from the ammonia plant and post-combustion carbon capture unit to be exported via a third-party pipeline for subsequent sequestration.
Gas transportation and processing projects
Saudi Arabia was the biggest regional spender on midstream and downstream projects last year. To address incremental volumes of gas entering the grid as Aramco increases its conventional and unconventional gas production, the state enterprise spent more than $17bn on gas processing and transportation projects in 2024.
In April last year, Aramco awarded $7.7bn in engineering, procurement and construction (EPC) contracts for a project to expand the Fadhili gas plant in the Eastern Province of Saudi Arabia. The project is expected to increase the plant’s processing capacity from 2.5 billion cubic feet a day (cf/d) to up to 4 billion cf/d.
In June, Aramco awarded 15 lump-sum turnkey contracts for the third expansion phase of the Master Gas System (MGS-3), worth $8.8bn. Then, in August, the company awarded contracts for the remaining two packages of the MGS-3 project, which were worth $1bn.
Saudi Aramco divided EPC works on the MGS-3 project into 17 packages. The first two packages involve upgrading existing gas compression systems and installing new gas compressors. The 15 other packages relate to laying gas transport pipelines at various locations in the kingdom.
The Master Gas System expansion will increase the size of the network and raise its total capacity by an additional 3.15 billion cf/d by 2028, with the installation of about 4,000 kilometres of pipelines and 17 new gas compression trains.
So far this year, the Saudi energy giant has selected the main contractor for a major project to develop a large-scale carbon capture and storage (CCS) hub in Jubail Industrial City.
India’s Larsen & Toubro Energy Hydrocarbon has been picked to perform EPC work on the first phase of the project, which is called the Accelerated Carbon Capture and Sequestration (ACCS) scheme, worth $1.5bn.
The aim of the ACCS scheme, which is expected to have nine phases in total, is to capture CO2 from Aramco’s northern gas plants at Wasit, Fadhili and Khursaniyah, as well as from the operations of Sabic and Saudi industrial gases provider Air Products Qudra.
The first phase of the ACCS project will have the capacity to store and sequester up to 9 million t/y of CO2 in the planned CCS hub in Jubail. The main facility that will be built in Jubail will capture streams from the acid gas enrichment units of the Wasit, Fadhili and Khursaniyah plants. The CO2 will be compressed, dried and fed into the collection pipeline system.
MEED’s April 2025 report on Saudi Arabia also includes:
> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
> POWER: Saudi power sector enters busiest year
> WATER: Saudi water contracts set another annual record
> CONSTRUCTION: Reprioritisation underpins Saudi construction
> TRANSPORT: Riyadh pushes ahead with infrastructure development
> BANKING: Saudi banks work to keep pace with credit expansion
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