Aramco, Total start testing Jubail refinery

Aramco, Total start testing Jubail refinery

Saudi Aramco and France's Total have started testing their new refinery at Jubail, three sources with knowledge of the project said, raising the prospect of full operation of the $14 billion facility ahead of a scheduled start-up in the third quarter of 2013.

September 5, 2012 5:37 by Reuters

Saudi Aramco and France’s Total have started testing their new refinery at Jubail, three sources with knowledge of the project said, raising the prospect of full operation of the $14 billion facility ahead of a scheduled start-up in the third quarter of 2013.

Saudi Aramco Total Refinery and Petrochemicals Company (SATORP) has fired up the boilers at the plant, designed to reduce Saudi reliance on imports and meet rapidly rising fuel demand.

The company hopes to bring the first of two crude distillation units (CDU) online before year-end, the sources said.

One of the sources said the new facility could be fully operational in the second quarter.

Top oil exporter Aramco relies heavily on imported gasoline and gasoil and plans to boost domestic refining capacity from 2.26 million bpd to 3.5 million bpd by 2016.

“The project is in pre-commissioning stage,” one Saudi-based industry source said.

A spokesman for SATORP said the project was on schedule but gave no other details. A Total spokesperson contacted by Reuters had no immediate comment.

“Boilers have already started. The first 200,000 bpd CDU is going to start before the end of the year, that is what the JV is targeting,” a second industry source said, adding that the second CDU was due to be brought online in the first quarter of next year.

The joint venture’s chief executive said last September he expected the refinery to be fully operational in December 2013, although in Saudi Aramco’s 2011 annual review published last May, this was brought forward to the third quarter of 2013.

Saudi Arabia’s domestic fuel consumption has been booming because of a growing population and economy. Heavy government subsidies that make retail fuel prices some of the lowest in the world have also helped stoke demand.

“Aramco wants to become as self-sufficient as they can as quickly as possible,” the second industry source said.

The state-run company is building two more refineries apart from SATORP; one near the Red Sea city of Yanbu with China’s Sinopec, and another at Jizan, near the border with Yemen. All will produce cleaner fuels and some petrochemicals.

It has also started upgrading existing refineries with a $2 billion project at a joint venture with U.S.-based Exxon Mobil due to be in operation in 2013.

Jubail will refine Saudi heavy crude into a range of fuels — from gasoline to petroleum coke — for domestic consumption and export.

Around 54 percent of the project’s output will be diesel and jet fuel, with an estimated quantity of 11.4 million tonnes per year. Annual gasoline and petcoke production is estimated to be around 2.8 million tonnes and 2.1 million tonnes respectively.

(Additional reporting by Muriel Boselli in Paris, Editing by Daniel Fineren and David Cowell)