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
  • Public Investment Fund backs Neom

    16 April 2026

    Commentary
    Colin Foreman
    Editor

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Public Investment Fund (PIF) has backed Neom by including it as one of six strategic ecosystems in its newly approved 2026-30 strategy.

    The future of the $500bn gigaproject had been thrown into doubt following the postponement of the 2029 Asian Winter Games at the Trojena mountain resort, the cancellation of construction contracts – such as the $5bn deal with Italian contractor Webuild for dam works at Trojena – and the slowdown of development at The Line, where tunnelling contracts were cancelled and staff left the project.

    The backing comes as Neom’s operational focus appears to be evolving in response to shifting regional dynamics and global economic conditions. For example, on 15 April Neom posted on its official X account about a new Europe-Egypt-Neom-GCC corridor, describing it as a faster route for time-sensitive goods. It said the corridor combines trucking and ferry services to move goods quickly into the Gulf, adding that importers from several European markets are already using it to reach the UAE, Kuwait, Iraq, Oman and beyond.

    Powered by Pan Marine, DFDS and regional RoPax services, the initiative is positioned as a way to add flexibility and resilience to regional supply chains. This emphasis on logistics and immediate trade utility suggests a shift away from the more speculative architectural announcements that characterised Neom’s early years, towards activity more directly tied to current market realities.

    PIF’s broader 2026-30 strategy places heavy emphasis on “delivering competitive domestic ecosystems to connect sectors, unlock the full potential of strategic assets, maximise long-term returns and continue to drive the economic transformation of Saudi Arabia”.

    The inclusion of Neom as a standalone ecosystem within the Vision Portfolio suggests that while the project remains part of the kingdom’s Vision 2030 goals, it will be subject to the fund's focus on working with the private sector.

    That means the long-term success of Neom will increasingly depend on its ability to attract external investment and function as a viable economic hub rather than just a state-funded construction site.

    MEED’s April 2026 report on Saudi Arabia includes:

    > COMMENT: Risk accelerates Saudi spending shift
    > GVT &: ECONOMY: Riyadh navigates a changed landscape
    > BANKING: Testing times for Saudi banks
    > UPSTREAM: Offshore oil and gas projects to dominate Aramco capex in 2026
    > DOWNSTREAM: Saudi downstream projects market enters lean period
    > POWER: Wind power gathers pace in Saudi Arabia
    > WATER: Sharakat plan signals next phase of Saudi water expansion
    > CONSTRUCTION: Saudi construction enters a period of strategic readjustment
    > TRANSPORT: Rail expansion powers Saudi Arabia’s infrastructure push

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16417262/main.jpeg
    Colin Foreman
  • Kuwait gas project worth $3.3bn put on hold

    16 April 2026

     

    State-owned Kuwait Gulf Oil Company’s (KGOC’s) planned tender for the development of an onshore gas plant next to the Al-Zour refinery has been put on hold due to uncertainty created by the US and Israel’s war with Iran, according to industry sources.

    The project budget is estimated to be $3.3bn, and the last meeting with contractors to discuss the project took place in Kuwait on 10 February.

    Previously, it was expected to be tendered in late March, but the tendering process was delayed due to the regional conflict and disruption to shipping through the Strait of Hormuz.

    One source said: “This tender is now effectively on hold while KGOC waits for increased stability in the region before it invites companies to bid for the contract.”

    Under current plans, the plant will have the capacity to process up to 632 million cubic feet a day of gas and 88.9 million barrels a day of condensates from the Dorra offshore field, located in Gulf waters in the Saudi-Kuwait Neutral Zone.

    Ownership of the field is disputed by Iran, which refers to the field as Arash.

    Iran claims the field partially extends into Iranian territory and asserts that Tehran should be a stakeholder in its development.

    It is believed that the Dorra field’s close proximity to Iran will make development difficult due to the current security environment.

    The offshore elements of the project are expected to be especially difficult to protect from attacks from Iran.

    In July last year, MEED reported that KGOC had initiated the project by launching an early engagement process with contractors for the main engineering, procurement and construction tender.

    France-based Technip Energies completed the contract for the front-end engineering and design.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

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

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16413221/main.png
    Wil Crisp
  • Iraq pushes to revive oil pipeline through Saudi Arabia

    16 April 2026

    Iraq is pushing to revive an oil pipeline that passes through Saudi Arabia, allowing it to diversify export routes.

    Saheb Bazoun, a spokesman for Iraq’s Oil Ministry, said the pipeline would help to insulate Iraq from any future blockades of the Strait of Hormuz, which has been largely closed since 28 February.

    The original pipeline through Saudi Arabia has not been used for more than 30 years and would need work to be done in order to bring it online.

    It is 1,568km long, extending from the city of Zubair in Iraq to the Saudi port of Yanbu on the Red Sea.

    The pipeline was built in two phases during the 1980s. The first phase stretches between Zubair and Khurais, while the second extends to Yanbu. The pipeline’s operating capacity reached over 1.6 million barrels a day (b/d).

    Following the Gulf War, the pipeline was shut down in August 1990. It has remained out of operation for decades, despite Iraq’s several attempts to restart it.

    The original pipeline project cost over $2.6bn, including storage tanks and loading terminals.

    In the wake of the US and Israel attacking Iran on 28 February, global markets have lost 11 million barrels a day (b/d) of oil supply due to the effective closure of the Strait of Hormuz.

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

    Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

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

    > GCC CONTRACTOR RANKING: Construction guard undergoes a shift
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16413290/main.jpg
    Wil Crisp
  • Algeria opens bidding for water treatment plant

    15 April 2026

     

    State-owned Cosider Pipelines, part of Algeria’s public infrastructure group Cosider, has issued a tender for the construction of a demineralisation plant in In Salah in Algeria.

    The contract covers the design, supply, installation, testing and commissioning of a plant with a treatment capacity of 62,000 cubic metres a day (cm/d).

    The tender is open to local and international companies specialising in the design and construction of demineralisation and reverse osmosis desalination plants.

    The bid submission deadline is 26 April.

    The project will be located at In Salah, a key industrial area in southern Algeria, where treated water supply is important for both municipal and industrial use.

    Cosider said that individual bidders must demonstrate that they have completed at least one reverse osmosis demineralisation or desalination plant with a capacity of 20,000 cubic metres a day or more.

    They must also show an average annual turnover of at least AD1bn ($7.7m) for their five best years over the past decade.

    For consortium bids, all partners must share full responsibility for the contract, while the lead company must meet the technical and financial requirements.

    Recent projects

    In 2023, MEED reported that Riyadh-based water utility developer Wetico had won two contracts to develop water desalination plants in Algeria.

    Societe Algerienne de Realisation de Projects Industriels (Sarpi) awarded the contract for the El-Tarf desalination plant, while Entreprise Nationale de Canalisations (Enac) is the client for the Bejaja facility.

    Both plants were commissioned in 2025, each with a production capacity of 300,000 cm/d.

    Separately, Wetico was the main contractor on a third plant commissioned last year. The Cap Dijinet 2 seawater desalination plant in Boumerdes province covers 18 hectares and also has a capacity of 300,000 cm/d.

    Like many countries, Algeria is facing pressure on resources due to longer and more frequent droughts. Seawater desalination is seen as a key driver of the government’s strategy to guarantee drinking water supply.

    According to previous reports, the government is planning to build up to six additional plants by 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16404325/main.jpg
    Mark Dowdall
  • WEBINAR: UAE Projects Market 2026

    15 April 2026

    Webinar: UAE Projects Market 2026
    Tuesday, 28 April 2026 | 11:00 GST  |  Register now

    Agenda:

    • Overview of the UAE projects market landscape
    • 2025 projects market performance
    • Value of work awarded 2026 YTD
    • Impact of the Iran conflict on the projects market and real estate, assessing supply chain disruptions, material cost inflation and war risk premiums
    • Key drivers, challenges and opportunities
    • Size of future pipeline by sector and status
    • Ranking of the top contractors and clients
    • Summary of key current and future projects
    • Short and long-term market outlook
    • Audience Q&A

    Hosted by: Colin Foreman, editor of MEED 

    Colin Foreman is editor and a specialist construction journalist for news and analysis on MEED.com and the MEED Business Review magazine. He has been reporting on the region since 2003, specialising in the construction sector and its impact on the broader economy. He has reported exclusively on a wide range of projects across the region including Dubai Metro, the Burj Khalifa, Jeddah Airport, Doha Metro, Hamad International airport and Yas Island. Before joining MEED, Colin reported on the construction sector in Hong Kong.

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16401868/main.gif
    Colin Foreman