Saudi Aramco President and CEO Amin H. Nasser called for a new era of industrial diversification, anchored by specialty chemicals, and underpinned by a widespread and rapid in-Kingdom expansion of small to medium enterprises that produce high-value finished and semi-finished products in the petrochemicals conversion sector.
This approach will unlock opportunities for the Kingdom’s economic diversification, job creation and innovation potential, and create a world-leading downstream industry, said Nasser. Speaking at the 4th Saudi Downstream Forum in Jubail, Nasser said: “To date, the Kingdom’s downstream economic growth has achieved global leadership in the manufacture and export of commodity products.” He added: “While Saudi Arabia certainly needs its commodities production strength, we also need to radically alter the downstream equation to derive greater benefits in-Kingdom, through knowledge-based and innovation-driven small and medium sized enterprises.”
Nasser said Saudi Arabia is already a global leader in petroleum and petrochemical commodities, but today “we have a tremendous opportunity to also become a leader in downstream conversion.” With most of the Kingdom’s petrochemicals presently being exported as commodities, major opportunities exist to add value by turning them into high-value, semi-finished and finished products. Diversification into specialty chemicals is expected to increase returns from the current level of about $500 per ton to about $2,000 per ton by 2040.
Nasser said that Saudi Aramco’s vision for the creation of a world leading downstream sector in Saudi Arabia is built on four key drivers: maximizing value for the Kingdom’s crude oil production, including vertical and horizontal integration across the hydrocarbon chain; enabling the creation of conversion industries that produce semi-finished and finished goods to diversify the economy; developing advanced technologies and innovation; and, enabling the Kingdom’s sustainable development. Saudi Aramco’s strategy is to strike a better balance between its unparalleled upstream capacity of 12 million barrels of crude oil per day and its current refining capacity of 5.4 million barrels per day of crude oil in-Kingdom and worldwide.
Saudi Aramco has an ambitious plan to raise the Company’s total global refining capacity throughput to between 8 to 10 million barrels per day. Saudi Aramco is collaborating with the Ministry of Petroleum and Mineral Resources, the Royal Commission for Jubail and Yanbu, and the Saudi Arabian General Investment Authority to build value parks and locate service providers adjacent to petrochemical facilities, such as Rabigh PlusTech Park at Petro Rabigh on the west coast and the PlasChem Park adjoining Sadara in Jubail Industrial City 2.
In his keynote remarks, Nasser called on the industry to do much more to support the development
of home-grown downstream technologies â€” an area in which the Kingdom can make major advances â€” such as breakthrough crude oil-to-chemicals technologies that will make oil a viable petrochemical feedstock.
Saudi Aramco is currently developing and testing highly advanced oil-to-chemicals technologies, he said.