Refinery Joint Venture Sinopec and Saudi Aramco Form Joint Venture for Saudi Refinery
Two big players of the oil business join forces: Saudi Armaco and Sinopec of China announced to enter a joint venture for the development and operation of the Yasref refinery, Yanbu, Red Sea (currently under construction). This project marks Sinopec’s first international downstream investment, officials say.
Dhahran/Saudi Arabia – Chinese Petrochemical Corporation Sinopec teams up with Saudi Aramco for a refinery project at the Red Sea. Both companies agreed on a joint venture for the previously announced Yanbu Aramco Sinopec Refinery (Yasref). This joint venture agreement follows a Memorandum of Understanding between the two firms signed in early 2011.
“Yasref is uniquely placed to seize market opportunities, and it demonstrates our unwavering commitment to significantly grow our downstream portfolio, and in creating win-win partnerships for us and our stakeholders,” Khalid A. Al-Falih, president and CEO of Saudi Aramco, said. “Among Yasref’s many contributions will be to provide training, employment and industrial and economic development opportunities for Saudi nationals and for the growth of local enterprises.”
Sinopec will hold a 37.5 percent share in Yasref with Aramco holduing the remaining 62.5 percent, company speakers said. Both companies expect the Yasref refinery to profit from close by supply of crude oil from Saudi Arabia's rich oilfields. The new refinery at Yanbu is currently under construction (10 percent completed) and scheduled for operation in 2014. It will process 400,000 barrels per day (bpd) of Arabian Heavy crude oil, producing high-quality transportation fuels, speakers explained.
“Co-Operation Across the Hydrocarbon Value Chain”
“Our mutually progressing partnership with Sinopec has continued to flourish across the hydrocarbon value chain from crude oil supply to refining and petrochemicals in Fujian to YasrefEF today, and is a testimony of our continued efforts to enhance collaboration between the two companies,” Al-Falih added. “Yasref, being Sinopec’s first international downstream investment, will definitely strengthen further the longstanding bond between the two companies, and I am confident it will also yield mutual benefits for the Kingdom of Saudi Arabia and the People’s Republic of China.
Previuosly, both companies already cooperated in Chinese refining and petrochemical projects as well as in a gas exploration company in Saudi Arabia. Sinopec, the biggest Asian-owned refiner operating in Asia, is also Saudi Aramco’s largest crude oil buyer.
Refinery Strengthens Strategic Partnership
“Sinopec and Saudi Aramco have enjoyed substantial cooperation in the fields of gas exploration, oil refining, oil trade, and engineering services. The implementation of this project will usher in a new chapter for Sinopec’s investment in refinery and petrochemical projects in Saudi Arabia,” Sinopec's chairman Fu Chengyu said. “It will also help to extend the strategic cooperation of the two companies in the petroleum and petrochemical value chain, and further strengthen the complementary strategic partnership of the two parties. Sinopec is very pleased to contribute to the already solid economic ties between China and Saudi Arabia, whilst furthering our commitment to social responsibility and the pursuit of green, low-carbon development.”
Yasref is also expected to provide a platform for increased industrial development in the Yanbu area supporting the expansion of the local economy and providing job opportunities and business opportnities or domestic firms and workers. It is estimated that the refinery will create 1,200 direct and 5,000 indirect employment opportunities, Saudi Aramco explained.