Meed | Petrochemicals ambitions define Saudi downstream

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.

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Indrajit Sen

Exclusive from Meed

Jedco maps next phase of Jeddah airport expansion
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22 September 2026
Oman tenders Thumrait Industrial City infrastructure
22 September 2026
Kuwait halves drilling contractor pool
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Abu Dhabi expects 45% emissions cut as electricity demand rises
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Jedco maps next phase of Jeddah airport expansion
22 September 2026

Jeddah Airports Company (Jedco) has outlined plans for the next phase of expansion at King Abdulaziz International airport (KAIA) in Jeddah.

The programme comprises six upcoming contractor packages spanning airside works, terminal upgrades and utilities as Jedco advances its long-term expansion plans.

The opportunities include airfield rehabilitation; a five-year construction framework covering multiple workstreams and facility types; a Terminal 3A (T3A) package; Terminal 1 (T1) optimisation; a fuel farm; and Concourse C works.

The packages cover terminal buildings and ancillary facilities, runways, taxiways and aprons, hangars, fuel systems, airside facilities, supporting infrastructure and utility networks.

Tendering and award activity will be staggered over the next two years. Airfield rehabilitation is targeted for Q3 2026. The construction framework is scheduled for Q4 2026 and will run for five years.

The T3A package is planned for Q1 2027 and will be delivered under an early contractor involvement contract. Local contractors are encouraged to bid as part of a joint venture with an experienced international partner.

T1 optimisation is planned for Q4 2027, the fuel farm for Q2 2027, and Concourse C – currently the latest of the six milestones – for Q2 2028.

The new packages add detail to Jedco’s wider expansion plans disclosed in 2023, when it was reported that the company would invest SR115bn ($31bn) to increase KAIA’s capacity to 114 million passengers a year, with an overall completion target of 2031.

Jedco has recently awarded several significant contracts linked to the airport’s upgrade programme.

In November 2024, a joint venture of local Algihaz Contracting and Turkey’s TAV was awarded a contract to rehabilitate the South Terminal to serve Umrah and Hajj pilgrims, with Singapore’s Surbana Jurong acting as consultant.

Earlier that year, Jedco also awarded France’s Alstom a contract to increase the capacity of the Innovia automated people mover at Terminal 1, including new cars and upgrades to signalling, communications and controls.

Surbana Jurong is expected to play a leading role in future KAIA expansion plans and is currently providing technical advisory and project management consultancy for more than 100 capital projects for Jedco, valued at over SR6bn ($1.6bn).

These upgrades are expected to boost KAIA’s annual capacity in line with Saudi Arabia’s Vision 2030 and National Aviation Strategy, enhancing the experience for domestic travellers and millions of Hajj and Umrah pilgrims.

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Yasir Iqbal

Contractor wins $105m Medina university hospital deal

22 September 2026

Riyadh-based construction firm Al-Mansouria General Contracting Company has been awarded a SR396m ($105.6m) contract to complete the remaining construction works on the Taiba University Hospital project in Medina.

The contract scope includes structural completion, remaining civil works, mechanical, electrical and plumbing installations, specialised clinical fit-outs and medical gas infrastructure to bring the long-stalled facility into operation.

Located on King Khalid Road along Medina’s Third Ring Road, the teaching hospital will have a capacity of 563 beds.

The contract duration is three years, with delivery targeted for late 2029.

The latest award follows a prolonged procurement cycle that began more than a decade ago as part of a public budget drive to expand Saudi Arabia’s higher education infrastructure.

The project’s first phase was initially signed in December 2011 with local firm Al-Muhaidib Contracting under a SR500m ($133.3m) contract.

Groundbreaking for the eight-storey complex took place in July 2013. The project covers a gross floor area of more than 200,000 square metres.

Progress stalled shortly thereafter due to reported structural delays and the reallocation of public capital budgets across the kingdom’s social infrastructure pipeline.

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

Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:

> AGENDA: Gulf nuclear revival takes shape

> MARKET FOCUS: Kuwait keeps dealmaking alive under fire

> INDUSTRY REPORT: Gas processing takes centre stage in Mena region

> INTERVIEW: Emsteel persists with business productivity and efficiency

> TUNNELS: The Gulf’s next construction boom is happening underground

To see previous issues of MEED Business Review, please click here

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Yasir Iqbal

Oman tenders Thumrait Industrial City infrastructure
22 September 2026

Oman’s Public Establishment for Industrial Estates (Madayn) has tendered an estimated RO15m ($39m) contract to develop infrastructure for Thumrait Industrial City.

The tender was issued on 14 September, with bids due by 12 November.

The scope covers site-wide utilities and services, including an internal road network, stormwater channels and culverts. It also includes installing sewerage and water networks, along with landscaping works.

In addition, Madayn intends to build plug-and-play industrial units and a facilities building.

The first phase of the development will cover about 120,000 square metres (sq m).

Thumrait Industrial City is located in Oman’s Dhofar Governorate and spans an area of more than four million sq m.

The project location is close to concession blocks, quarry sites and the Najd agricultural areas. It is positioned to attract industrial investments in sectors such as mining and minerals processing (including gypsum and cement), food production, and a range of light and general manufacturing activities.

In March, Madayn said it is preparing to invest more than RO245m ($637m) to upgrade and expand infrastructure across its industrial cities between 2026 and 2030, as part of efforts to attract new investment and advance economic diversification.

According to media reports, Madayn chief executive Dawood Bin Salim Al-Hadabi said the programme is part of an expanded, phased plan aligned with Oman Vision 2040 and the authority’s long-term Madayn 2040 strategy.

The objective is to deepen Oman’s industrial base and spread growth across the sultanate’s governorates.

Madayn said the pipeline comprises about 90 strategic projects to improve industrial-city infrastructure, extend serviced land and increase the overall ease of doing business for investors.

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Yasir Iqbal
Kuwait halves drilling contractor pool
22 September 2026
State-owned upstream operator Kuwait Oil Company (KOC) has reduced the number of approved contractors for onshore drilling and shallow-well maintenance from 51 to 24.

Firms that are no longer qualified include major contractors such as Italy’s Saipem, Oklahoma-based Helmerich & Payne and Houston-based Patterson-UTI Energy.

The latest list still includes a wide range of Kuwaiti, regional and international companies, according to the latest update on its electronic system, published on 21 September 2026.

The full list of contractors that are now qualified to participate in tenders is:
- Burgan Company for Well Drilling, Trading & Maintenance (Kuwait)
- Kuwait Drilling Company (Kuwait)
- Sun Drilling Kuwait (Kuwait)
- TDL Kuwait for Oil Rigs & Natural Gas Extraction Activities, Services and Facilities (Kuwait)
- United Precision Drilling (Kuwait)
- Abraj Energy Services (Oman)
- Adnoc Drilling Company (UAE)
- Arabian Drilling Company (Saudi Arabia)
- Anton Oilfield Services (China)
- China Oilfield Services (China)
- Egyptian Drilling Company (Egypt)
- CNPC Bohai Drilling Engineering Company (China)
- Great Wall Drilling Company (China)
- John Energy (India)
- Kerui Oilfield Service (China)
- KCA Deutag Drilling (Germany)
- Mohammed Al-Barwani Petroleum Services (Oman)
- Nabors Drilling International (US)
- National Drilling & Services Company (Oman)
- Sea & Land Drilling Contractors (Oman)
- Sinopec International Petroleum Service Corporation (China)
- Karamay Jianye Energy (China)
- Modern Drilling Company (Egypt)
- Grey Wolf Drilling International (US)
An earlier list, which was published on 11 February, included 51 qualified companies.

The reduction in qualified drilling contractors follows KOC’s notice on 27 April this year, informing existing qualified contractors that they would need to reapply.
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Wil Crisp

Abu Dhabi expects 45% emissions cut as electricity demand rises

21 September 2026

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Abu Dhabi-based Emirates Water & Electricity Company (Ewec) expects carbon emissions from power and water production to fall by more than 45% by 2035 as the UAE expands renewable energy and reverse osmosis (RO) desalination.

The state offtaker's latest long-term system planning forecasts emissions will decline from about 42 million tonnes in 2019 to approximately 23 million tonnes in 2035.

The reduction is expected despite annual electricity demand that is forecast to rise by about 70% in 2026-33.

Ewec said the expansion of renewable energy and the shift towards RO desalination will be the principal drivers of the reduction.

The company plans to increase Abu Dhabi's solar capacity to 14GW by 2030 and more than 35GW by 2035. This will be supported by up to 15GW of battery storage capacity.

According to regional project tracker MEED Projects, Ewec has over $16bn-worth of power and water projects in the execution stage as part of its long-term procurement programme to increase renewable energy and low-carbon water production capacity.

This includes a 5.2GW Abu Dhabi solar and battery energy storage system (bess) round-the-clock renewable energy project, as well as three 1.5GW solar photovoltaic independent power projects (IPP): Al-Ajban, Al-Khazna and Al-Zarraf.

It also comprises the 1GW Al-Dhafra open-cycle gas turbine power plant, the 2.5GW Taweelah C combined-cycle gas turbine (CCGT) plant and a separate 400MW bess IPP.

As previously reported, it is expected that the developer's agreement for the 3.3GW Al-Nouf 1 CCGT IPP will be signed by the end of the year, while contractors are preparing to submit bids for a separate 2.6GW power plant project in Ajman.

The expansion of solar and battery storage is expected to reduce the system's reliance on gas-fired generation. However, gas-fired generation will continue to provide flexibility to support the system and balance intermittent renewable power output, according to Ewec.

The offtaker also expects RO desalination to account for more than 95% of total water production by 2035, with the procurement programme supporting the Abu Dhabi Department of Energy's Clean Energy Strategic Target 2035 for electricity production and the UAE Net Zero by 2050 Strategy.