meed-logo

line1 line2 line3
SIGN IN / REGISTER

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

https://image.digitalinsightresearch.in/uploads/NewsArticle/13477916/main.gif
Indrajit Sen

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

Click here to register
Exclusive from Meed
Related Articles
  • Acwa signs Mauritania gas IPP agreements

    2 July 2026

    Saudi Arabia's Acwa has announced it has signed the public-private partnership (PPP) and power purchase agreement (PPA) for the 230MW N'diago combined-cycle gas turbine (CCGT) power plant in Nouakchott, Mauritania.

    The agreements cover the development, financing, construction and operation of the project. They were signed in Nouakchott  in the presence of senior officials from the Mauritanian government and Acwa chairman Mohammad Abunayyan.

    The project is Mauritania's first large-scale gas-fired independent power project (IPP). It is also expected to be the country's first major gas-fired power plant procured through a PPP structure.

    The CCGT plant will provide 230MW of baseload generation capacity. It will use Mauritania's domestic natural gas resources to supply the national grid.

    Sepaarately, the Mauritanian Electricity Company (Somelec) has been advancing procurment for the construction of a 50MW solar power and battery enery storage systems (Bess) IPP project. In May, it issued an expression of interest (EoI) request.  

    Mauritania currently has several wind and solar power projects in the early study stages, according to regional project tracker MEED Projects.

    There are also plans to build a 1,200MW wind power plant near port Etienne in the bay province of Nouadhibou, for which, China Energy Engineering was appointed as the main contractor in 2024. 

    Meanwhile, Acwa's portfolio comprises 111 assets that are operational, under construction or in advanced development. These represent investments of SR468.9bn ($125bn).

    According to the company, it has a power generation capacity of 98GW, including 52.3GW of renewable energy, and manages 9.7 million cubic metres a day of desalinated water globally.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17525605/main.jpg
    Mark Dowdall
  • Contractor wins Jeddah road expansion deal in Riyadh

    2 July 2026

     

    The Royal Commission for Riyadh City (RCRC) has awarded a contract for the Jeddah Road Development Project in Riyadh.

    Local construction firm Saudi Pan Kingdom (Sapac) won the contract.

    Spanning 29 kilometres, the scheme includes 14 bridges and five lanes.

    Designed to handle up to 353,000 vehicles a day, the road is expected to be completed by 2028, with mobilisation works already under way.

    The project forms part of the third package of the RCRC’s Riyadh Main and Ring Road Axes Development Programme, which was announced in January.

    The other schemes include:

    > Taif Road Development Project: The project stretches 15km and includes four bridges, each with four lanes. It also features two tunnels. It will have a capacity of up to 200,000 vehicles a day and will enhance connectivity between Riyadh’s southern and western districts and the city centre.

    > Thumamah Road Development Project: The eastern section of the project will span 8km and include three bridges and three tunnels, linking the northern and eastern parts of Riyadh. The project will have a daily capacity of up to 200,000 vehicles.

    > King Abdulaziz Road Development Project: The northern section of the project stretches 4.7km and will include four bridges, four lanes and one tunnel, with a capacity of up to 450,000 vehicles per day.

    > Othman Bin Affan Road Development Project: The northern section will span 4.3km and include seven bridges and other related upgrades to enhance traffic flow across northern Riyadh. The project will have a daily capacity of up to 500,000 vehicles.

    > Second phase of engineering enhancements for congested areas: This project targets eight locations across the city’s road network, where advanced engineering solutions will be applied to reduce congestion and improve intersection performance, increasing traffic capacity by 40% to 60%.

    The contract for the Jeddah Road Development Project is the latest of several high-profile deals awarded by the RCRC recently. In May, it awarded an estimated SR5bn ($1.3bn) contract to construct the Sheikh Jaber Al-Sabah Road project in Riyadh.

    That contract went to a joint venture of Riyadh-based Al-Rashid Trading & Contracting Company (RTCC) and Turkiye’s IC Ictas.

    Stretching 12km, the project runs from Khurais Road to Al-Thumama Road and is a key component of the Second Eastern Ring Road scheme.

    Works include five interchanges: Prince Bandar, King Abdullah, Imam Abdullah, Dammam Road and Al-Thumama.

    In 2021, Saudi Arabia’s Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud said the population of Riyadh would double to 15-20 million people by 2030. 

    He directed government entities to work closely with the RCRC to prepare the city’s development strategy.

    The RCRC’s major projects include Riyadh Metro, Riyadh Art, Sports Boulevard, King Salman International Park, Green Riyadh and several road development projects in the capital.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17523376/main.jpg
    Yasir Iqbal
  • Dubai announces First Al-Khail road development project

    2 July 2026

    Dubai’s Executive Council has announced the First Al-Khail Street Development project, which will run parallel to Sheikh Zayed Road.

    The scheme comprises a 15-kilometre elevated carriageway with three lanes in each direction.

    According to a Dubai Media Office statement, “The project will provide access to areas including Al-Barsha, Al-Quoz, Business Bay and Meydan.”

    “It is expected to serve more than 2.6 million people and reduce travel time on Sheikh Zayed Road by 51% during peak hours,” the statement added.

    Designed to accommodate more than 9,000 vehicles an hour, construction is expected to begin in the third quarter of 2027, with completion targeted for 2030.

    The development forms part of a wider AED18bn ($5bn) programme covering initiatives related to culture, trade, infrastructure, Emiratisation, finance, investment, urban planning and the city’s population census.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17523587/main.jpg
    Yasir Iqbal
  • Contractors submit Saudi Landbridge Riyadh section bids

    2 July 2026

     

    Contractors submitted proposals on 30 June for a design-and-build contract to construct the Riyadh Rail Link, a new north-to-south railway line across the capital.

    The scope includes a 35-kilometre double-track line connecting SAR’s North-South Railway to the Eastern Railway network.

    Issued on 29 January, the tender also covers the procurement, construction and installation of associated infrastructure, including viaducts, civil works, utility diversions/installations, signalling systems and other related works.

    Once delivered, the Riyadh Rail Link is expected to become a key component of the Saudi Landbridge railway.

    In January, SAR said it would deliver the Saudi Landbridge project through a “new mechanism” by 2034, after failing to reach an agreement with a Chinese consortium to construct it, as MEED reported.

    In an interview with local media, SAR CEO Bashar Bin Khalid Al-Malik said the consortium failed to meet local content requirements, and that the project would instead be delivered in several phases under a different procurement model.

    Negotiations have been under way between Saudi Arabia and China-backed investors interested in developing the scheme through a public-private partnership (PPP). Al-Malik put the project cost at about SR100bn ($26.6bn).

    Overall, it comprises more than 1,500km of new track. A core element is a 900km railway between Riyadh and Jeddah, providing the capital with direct freight access to King Abdullah Port on the Red Sea.

    Other key elements include upgrading the existing Riyadh-Dammam line, a bypass around the capital known as the Riyadh Link, and a connection between King Abdullah Port and Yanbu.

    The Saudi Landbridge is one of the kingdom’s most anticipated project programmes. First announced in 2004, it was put on hold in 2010 before being revived a year later. Rights-of-way issues, route alignment and the high cost have been among the main stumbling blocks.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17522174/main.jpg
    Yasir Iqbal
  • Contractor appointed for Abu Dhabi Riviera residences

    1 July 2026

     

    Dubai-based real estate developer Mered has appointed Turkiye’s Sera Group as the main contractor for its Riviera Residences project on Al-Reem Island in Abu Dhabi.

    The development will comprise more than 400 one- to three-bedroom apartments and 11 villas.

    Lebanese engineering firm Dar Al-Handasah is the project consultant, while Switzerland’s Herzog & de Meuron is the architect.

    The enabling works are being carried out by local contractor NSCC International.

    Mered and Sera Group are also working together on the Iconic Tower project in Dubai Internet City, where the developer awarded the main contract in December 2024.

    The 67-storey tower is being built on a site covering about 6,368 square metres.

    Local firm Mirage is the project consultant, while Singapore-based Hirsch Bedner Associates is the project architect.

    Dubai-based Chawla Architectural & Consulting Engineers is the architect of record, and Omnium International is the quantity surveyor.

    The foundation works were carried out by local firm Dutch Foundations.

    Mered’s latest contract awards in the UAE market come amid heightened real estate and construction activity, with schemes worth more than $323bn at the execution or planning stages, according to UK-based analytics firm GlobalData.

    GlobalData forecasts that output from the UAE’s residential construction sector will grow by 3% in real terms in 2026-29, supported by infrastructure, energy and utilities developments, as well as residential construction projects.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17509888/main.jpg
    Yasir Iqbal