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
  • Adnoc funnels billions into boosting gas processing

    15 October 2026

     

    Abu Dhabi National Oil Company (Adnoc Group) is accelerating investment in gas processing and associated downstream infrastructure as demand in the UAE rises and the government prioritises lower-carbon energy growth.

    Rising gas consumption in the UAE is being driven by rapid population growth, greater household electrification, expanding industrial bases and demand from gas-intensive downstream segments such as petrochemicals, fertilisers and metals.

    Power generation and water desalination are also key sources of demand, while new industrial zones – as well as data centres supporting the expansion of artificial intelligence (AI) use in the country – add further baseload requirements.

    Adnoc Gas, Adnoc Group’s gas processing subsidiary, is leading the UAE’s push to expand gas processing capacity and is executing a major capital expenditure (capex) programme worth $28bn over 2026-30.

    As part of that capex plan, Adnoc Gas achieved final investment decision (FID) on the second and third phases of its Rich Gas Development (RGD) programme earlier this year.

    Adnoc Gas awarded $8.2bn of engineering, procurement and construction (EPC) contracts for the second and third phases of the RGD programme. These relate to the construction of a new gas processing train at the Habshan complex and a natural gas liquids fractionation train at the Ruwais gas processing facility, respectively.

    Adnoc Gas officially announced the awards, saying it selected China-based Wison Engineering for RGD phase 2 under a $3.9bn contract, while Italy’s Tecnimont was awarded the $4.3bn phase 3 contract.

    Adnoc Gas has also reiterated its $5bn capex for the first phase of the RGD scheme, which is under construction. The company awarded $5bn of engineering, procurement and construction management contracts in three tranches for phase 1 of the RGD programme in June last year, marking the company’s largest-ever capital investment.

    Across all three phases, Adnoc Gas has committed a total of $13.2bn to the RGD programme.

    Bab Gas Cap development

    Looking ahead, Adnoc Gas is advancing towards FID on the estimated $8bn Bab gas cap development. The project will process up to 1.85 billion cubic feet a day (cf/d) of raw feed gas once Adnoc Group begins extracting reserves from four underdeveloped onshore reservoirs at the Bab field: Thammama A, B and H (projected to yield a combined 1.45 billion cf/d) and Thammama F (projected at 396 million cf/d).

    Because existing trains at the Habshan complex cannot accommodate these supplementary volumes, the project entails building a processing plant approximately 170 kilometres from Abu Dhabi city, alongside pipeline networks and ancillary units.

    Adnoc Gas has split the EPC scope into four packages, with technical bids due on 16 November:

    • Package 1: Main Bab gas cap processing plant
    • Package 2: Early civil works
    • Package 3: Pipeline network
    • Package 4: Non-process facilities and associated infrastructure

    Four contractor consortiums prequalified to bid for the main contracts:

    • Larsen & Toubro Energy Hydrocarbon (India) / Samsung E&A (South Korea)
    • Saipem (Italy) / NMDC Energy (UAE)
    • Technip Energies (France) / JGC Corporation (Japan) / Sinopec (China)
    • Tecnimont (Italy) / China Petroleum Engineering & Construction Corporation 

    Gas pipeline investments

    Adnoc Group continues to invest in projects to enhance its gas transmission networks across the UAE, following its $3.5bn-plus capex on the Estidama programme earlier this decade to expand its sales-gas network in the country.

    Adnoc Gas recently awarded the main contract for a project to build a new pipeline that will supply gas from the Habshan scraper launcher station at its Habshan gas compression complex in Abu Dhabi to the Al-Nouf customer receiving station, for delivery to Emirates Water & Electricity Company (Ewec).

    The proposed 56-inch, 127km pipeline will help the UAE’s state utility, Ewec, meet additional gas demand to power the second phase of an AI data centre in Abu Dhabi, as well as support the relocation of some of its key assets in the Mirfa area of the emirate.

    Adnoc Gas awarded the EPC contract for the project to India-based Kalpataru Projects International.

    Separately, Adnoc is moving ahead with plans to build an oil pipeline network that will transport crude from its main offshore oil processing islands in the Gulf to its onshore crude export terminal at Jebel Dhanna, Abu Dhabi.

    The planned network will source crude from Zirku Island and Das Island, where Adnoc gathers and treats oil produced at Abu Dhabi’s offshore fields, among other processing hubs, and transport it about 300km inland to the Jebel Dhanna terminal.

    The proposed pipelines will eventually connect to the West-East crude pipeline network currently being built from Jebel Dhanna to the emirate of Fujairah, which is expected to be commissioned in 2027.

    Boosting chemicals output

    Meanwhile, following major investments over the past three years to set up specialty chemical plants under the first phase of its chemical derivatives complex in Ruwais Industrial City, Taziz is firming up plans for the second phase of the complex.

    Taziz has partnered with local conglomerate Alpha Dhabi to undertake a joint feasibility and market study and, subject to FIDs and regulatory approvals, the second phase of the Taziz Industrial Chemicals Zone could produce up to 14 new chemicals, with total output capacity of about 2.2 million tonnes a year (t/y).

    The chemicals under study include styrene and polystyrene, acrylic acid and derivatives, polyols, methylene diphenyl diisocyanate (MDI), epoxy resins and linear alpha-olefins. These are widely used across construction, automotive, packaging, consumer goods, infrastructure and advanced manufacturing.

    Taziz, Germany-based chemicals producer Covestro and XRG – all wholly or majority-owned subsidiaries of Adnoc Group –  have launched a joint feasibility study to assess the development of a world-scale MDI plant in Ruwais Industrial City.

    The partners aim to establish a facility in the Taziz Industrial Chemicals Zone with a production capacity of 660,000 t/y of MDI. The study will evaluate the technical, commercial and economic feasibility of the proposed plant, with the aim of informing a future investment decision.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20622502/main.gif
    Indrajit Sen
  • KBR wins Aramco offshore engineering services contract

    15 October 2026

    Register for MEED’s 14-day trial access 

    Saudi Aramco has awarded US-headquartered KBR a contract to provide engineering services to support facility upgrades across the Marjan offshore field in Gulf waters.

    Under the contract, awarded under Aramco’s existing general engineering services-plus (GES+) agreement with KBR, the US firm will provide engineering and project execution services to support key offshore processing, gas compression and power infrastructure facilities within the Marjan field.

    The project is expected to help maintain the Marjan field’s production capacity in line with recent field developments, KBR said in a statement.

    It is also expected to advance associated gas processing capabilities and strengthen the long-term performance of critical offshore assets through the integration of digital technologies, automation and power system enhancements, the Houston-based company added.

    KBR’s engineering services will specifically target upgrades to gas-oil separation plants (GOSPs) 2 and 3 at the Marjan offshore oil field development, a source told MEED.

    KBR is expected to execute the engineering work primarily from its offices in Houston and Al-Khobar.

    The Marjan offshore oil field, on Saudi Arabia’s eastern coast, was discovered in 1967 and began production in 1973.

    In 2019, Aramco committed an estimated $15bn in capital expenditure for a major infrastructure upgrade at the field under the Marjan increment programme. The project aims to increase the field’s oil production capacity by 300,000 barrels a day (b/d) of Arabian Medium crude oil to 800,000 b/d, process 2.5 billion cubic feet a day of gas, and produce an additional 360,000 b/d of ethane and natural gas liquids.

    The Marjan increment programme consists of about 20 engineering, procurement and construction (EPC) packages. The scope of work mainly involves a new GOSP and 24 offshore oil, gas and water-injection platforms.

    Since launching the Marjan increment programme, the Saudi energy giant has continued investing billions to maintain and upgrade infrastructure at the Marjan field.

    Aramco also plans to maintain steady capex in the future to sustain oil and gas production at the Marjan field development over the long term.

    ALSO READ: Consortium wins Safaniya field onshore facilities project

    MEED’s October 2026 report on Saudi Arabia includes:

    > COMMENT: Saudi projects hold steady
    > GOVERNMENT: Riyadh looks to reset its regional defence outlook
    > ECONOMY: Conflict bolsters case for Saudi economic diversification
    > BANKING: Saudi lenders readjust to lower lending and deposit climate
    > UPSTREAM: Aramco upstream spending gathers pace
    > DOWNSTREAM: Sabic steps up Saudi petchems investment
    > POWER: Saudi Arabia’s power award activity slows
    > WATER: Saudi water sector hits sharp slowdown
    > CONSTRUCTION: Saudi construction defies the headwinds
    > TRANSPORT: Saudi infrastructure pushes forward amid conflict
    > DATABANK: Saudi data indicates project spending shift

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20621733/main.jpg
    Indrajit Sen
  • Contractors win $317m Qatar road contracts

    15 October 2026

     

    Qatar’s Public Works Authority (Ashghal) has awarded three road development contracts worth more than QR1.1bn ($317m) to local contractors for works across Qatar.

    The contracts were formally awarded on 1 October, and each has a three-year construction period.

    Qatar Building Engineering Company secured a QR479m ($132m) contract for roads and infrastructure works in the Wadi Al-Banat North Zone 70 area.

    The contract covers constructing and upgrading local roads across several streets in the area. The scope also includes surface-water drainage, foul sewerage and treated sewage effluent networks, as well as connections to existing potable water, power and telecommunications infrastructure.

    The works include an attenuation tank near the Al-Khor Expressway and Link Road 7 to collect surface water and prevent infiltration into the Northern Aquifer.

    The contractor will also carry out groundwater mitigation works at the Al-Khor Expressway’s F1 interchange.

    Surface works include paved medians, including sections along Umm Al-Zubar Road near Lusail Palace, as well as landscaping.

    Qatar Trading & Contracting Group won the QR457m ($126m) contract to complete the remaining works on the C2021/44 roads and infrastructure scheme in Al-Sheehaniya (Package 1).

    The scheme covers site preparation, earthworks, and the construction of roads, pavements, road markings, signage, traffic-calming measures and street lighting.

    The scope also includes surface-water drainage and a complete pumping-station package encompassing civil, structural, mechanical, electrical, instrumentation, control and automation works.

    The contractor will also install a foul sewerage network with house connections across stages one and two, alongside a treated sewage effluent system, irrigation infrastructure, landscaping and landscape lighting.

    JAK Construction was awarded the QR217m ($60m) contract for the remaining works on the C/2021/038 roads and infrastructure project.

    The scope covers completing the remaining civil works, road network works, and key public-utility works across Umm Slal Ali, Umm Ebariya Village, South Umm Al-Amad and North Bu Fessela (Package 1).

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20617022/main.jpg
    Yasir Iqbal
  • Kuwait studies two oil export pipelines to bypass Hormuz

    15 October 2026

    State-owned Kuwait Petroleum Corporation is considering developing two oil export pipelines that would bypass the Strait of Hormuz, according to a senior Kuwaiti oil official.

    The pipelines would transport crude oil through Saudi Arabia and the UAE, aiming to diversify Kuwait’s export routes.

    Mohammed Al-Abduljalil, the deputy chief executive for planning and innovation at the KPC subsidiary Kuwait Oil Company, told Asharq Bloomberg that KPC had agreed with its partners in Saudi Arabia and the UAE to conduct feasibility studies for two separate projects.

    The first project extends from Kuwait’s Ahmadi region through Saudi Arabia to the Red Sea coast. The second extends from the Ahmadi region to Fujairah in the UAE.

    The pipelines would build on existing infrastructure and, if the plans are approved, are expected to take around four or five years to complete, Al-Abduljalil said.

    He said the first project, currently under study, would use the route of the existing East-West pipeline, which connects the kingdom’s eastern oil-producing regions to its western coast.

    The second project would follow the UAE’s Habshan-Fujairah pipeline route, enabling oil exports from the Sea of Oman coast, outside the Strait of Hormuz.

    Al-Abduljalil emphasised that both projects remain in a very early stage, noting that the agreement to conduct feasibility studies does not constitute a final investment decision to proceed with implementation.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20602978/main.jpg
    Wil Crisp
  • Gulf Spic submits lowest bid for Kuwait booster stations

    15 October 2026

     

    Kuwait-based Gulf Spic General Trading & Contracting Company has submitted the lowest bid for a contract to upgrade gas booster stations in the country.

    Gulf Spic’s bid was worth KD41.2m ($132m) and was one of four bids submitted for the contract.

    The project scope focuses on upgrading gas booster stations 140 and 150 (BS-140 and BS-150).

    The full list of bidders was:

    • Gulf Spic General Trading & Contracting Company, Kuwait – KD41.2m ($132m)
    • Combined Group Contracting Company (CGC), Kuwait  – KD45.5m ($146m)
    • Heavy Engineering Industries & Shipbuilding Company (Heisco), Kuwait – KD50.7m ($163m)
    • Alghanim International General Trading & Contracting Company, Kuwait – KD65.5m ($210m)

    The project was first announced in 2014. The invitation to bid was issued in May this year, and bids were submitted ahead of the 11 October deadline.

    The scope of work on the project covers:

    • Upgrade of BS-140 and BS-150
    • Replacement of dehydration facilities
    • Laying of pipelines
    • Installation of safety system
    • Construction of associated facilities

    Kuwait’s oil and gas sector is currently in the midst of a major crisis, as disruptions to shipping through the Strait of Hormuz have dramatically reduced exported crude oil volumes.

    The disruption is also creating significant challenges for oil and gas construction projects, which normally import equipment and materials through the Strait of Hormuz.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20602827/main.jpg
    Wil Crisp