JEDDAH – A $13 billion (€10 billion) joint venture refinery of Saudi Aramco and France's Total is likely to start diesel exports from the second quarter of next year and is targeting the European market, industry sources said Friday. Both companies have started testing the 400,000 barrels per day refinery at Jubail, and have indicated to potential buyers that diesel exports are likely to start by the second quarter next year, they said. Saudi Aramco Total Refinery and Petrochemicals Company has fired up the boilers at the plant, designed to reduce Saudi reliance on imports and meet rapidly rising fuel demand, sources have said. This indicates the refinery is expected to be fully operational ahead of an earlier schedule of December next year, traders said. Aramco and Total will jointly market the diesel, though volumes are not clear yet. “There's no clear picture yet, but marketing from both sides will own a share of volumes," the source added. The Jubail refinery will be the second in the Middle East to target the European market with regular diesel exports. The Saudi Aramco Total Refining and Petrochemical (Satorp) project – a joint venture between Saudi Aramco and French oil and petrochemicals major Total – would also produce 700,000 tons/year of paraxylene (PX), 140,000 tons/year of benzene and 200,000 tons/year of polymer-grade propylene after its completion in 2013. Saudi Aramco has a 62.5 percent interest in the venture, with 37.5 percent held by Total. “This is set to be a sophisticated, full-conversion 400,000 bbl/day plant, geared to meet high, and growing, domestic demand for transport fuels and global demand for middle distillates as well as to monetize heavy oil from the Manifa field," HSBC said in a research report. The Jubail refinery venture is also set to be listed on Saudi Arabia's Tadawul stock exchange as early as the fourth quarter of this year, as part of the firm's plan to list all new flagship oil refining and chemical projects on the bourse, the bank said. “This will offer equity investors significant new opportunities to participate in the Saudi downstream story," it said. Saudi Aramco has indicated that it will offer the public a 25 percent stake in the Jubail refinery venture, reducing its interest to the same level as Total's, the bank said. The company's next listing will likely be the new joint venture 400,000 bbl/day refinery at Yanbu on the Red Sea coast, according to HSBC. The project, named Yanbu Aramco Sinopec Refining (Yasref), is a joint venture between Saudi Aramco and China's state-owned refiner Sinopec, and is expected to start up in the second half of 2014. Saudi Aramco may also offer the public shares in the Sadara chemical project in Jubail as early as by the end of 2013, HSBC said. The Sadara project, a joint venture between Saudi Aramco and US-based Dow Chemical, is scheduled to start operations in the first quarter of 2015, according to the bank. “The $20 billion plant will be integrated with the Jubail refinery, consistent with Saudi Arabia's strategy to shift away from gas toward oil-based feedstock for new chemical projects," it said. A public listing of Aramco's new 200,000-400,000 bbl/day oil refinery project in Jazan is also likely before its start-up, which is targeted for the first quarter of 2017, the bank added. – SG
