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Saudi Arabia to Boost Role of Petrochemical Sector in National Economy

A Saudi Aramco sign is pictured at an oil facility in Abqaiq, Saudi Arabia, October 12, 2019. (Reuters)
A Saudi Aramco sign is pictured at an oil facility in Abqaiq, Saudi Arabia, October 12, 2019. (Reuters)
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Saudi Arabia to Boost Role of Petrochemical Sector in National Economy

A Saudi Aramco sign is pictured at an oil facility in Abqaiq, Saudi Arabia, October 12, 2019. (Reuters)
A Saudi Aramco sign is pictured at an oil facility in Abqaiq, Saudi Arabia, October 12, 2019. (Reuters)

Saudi Aramco and France's TotalEnergies awarded Engineering, Procurement, and Construction (EPC) contracts for the $11 billion "Amiral" complex, a petrochemicals facility expansion at the SATORP refinery.  

The new deal is a step towards Riyadh's expansion in promoting petrochemical products for the future and boosting its role in the national economy.  

The award of EPC contracts for primary process units and associated utilities marks the start of construction work on the joint petrochemical expansion following the final investment decision in December 2022.  

The signing ceremony was attended by Aramco CEO Amin Nasser, TotalEnergies CEO Patrick Pouyanne, Minister of Land, Infrastructure and Transport of South Korea Won Hee-ryong, government officials from Saudi Arabia, France, and South Korea, and company executives from Aramco, TotalEnergies and EPC firms.  

Mixed values  

The new complex will be integrated with the existing SATORP refinery in Jubail. It aims to house one of the giant mixed-load steam crackers in the Gulf, which can produce 1,650 kilotons per annum of ethylene and other industrial gases.  

The expansion is expected to attract more than $4 billion in additional investment in various industrial sectors, including carbon fibers, lubes, drilling fluids, detergents, food additives, automotive parts, and tires. It is also expected to create around 7,000 local direct and indirect jobs.  

Industry  

Nasser said that the SATORP complex has proven over the past years that it is among the best in the Middle East regarding operational, commercial, and environmental performance.  

He expected the new project to add value to the refining, chemicals, and marketing system in the country and worldwide, especially in converting liquids into chemicals.  

He indicated that the Amiral project also contributes to the development of the industrial system, in line with Saudi Vision 2030.  

For his part, Pouyanne said that the expansion project reinforces the exemplary relationship that the two companies have enjoyed for several decades in Saudi Arabia.  

SATORP CEO Abdullah al-Suwailem told Asharq Al-Awsat that the project achieves sustainability and supports the national industry by converting part of the fuel into petrochemical products to support the national economy.

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BP Nears Deals for Oil Fields, Curbs on Gas Flaring in Iraq

British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
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BP Nears Deals for Oil Fields, Curbs on Gas Flaring in Iraq

British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)

Iraq and British oil giant BP are set to finalize a deal by early February to develop four oil fields in Kirkuk and curb gas flaring, Iraqi authorities announced Wednesday.

The mega-project in northern Iraq will include plans to recover flared gas to boost the country's electricity production, they said.

Gas flaring refers to the polluting practice of burning off excess gas during oil drilling. It is cheaper than capturing the associated gas.

The Iraqi government and BP signed a new memorandum of understanding in London late Tuesday, as Prime Minister Mohammed Shia al-Sudani and other senior ministers visit Britain to seal various trade and investment deals.

"The objective is to enhance production and achieve optimal targeted rates of oil and gas output," Sudani's office said in a statement.

Iraq's Oil Minister Hayan Abdel Ghani told AFP after the new accord was signed that the project would increase the four oil fields' production to up to 500,000 barrels per day from about 350,000 bpd.

"The agreement commits both parties to sign a contract in the first week of February," he said.

Ghani noted the project will also target gas flaring.

Iraq has the third highest global rate of gas flaring, after Russia and Iran, having flared about 18 billion cubic meters of gas in 2023, according to the World Bank.

The Iraqi government has made eliminating the practice one of its priorities, with plans to curb 80 percent of flared gas by 2026 and to eliminate releases by 2028.

"It's not just a question of investing and increasing oil production... but also gas exploitation. We can no longer tolerate gas flaring, whatever the quantity," Ghani added.

"We need this gas, which Iraq currently imports from neighboring Iran. The government is making serious efforts to put an end to these imports."

Iraq is ultra-dependent on Iranian gas, which covers almost a third of Iraq's energy needs.

However, Teheran regularly cuts off its supply, exacerbating the power shortages that punctuate the daily lives of 45 million Iraqis.

BP is one of the biggest foreign players in Iraq's oil sector, with a history of producing oil in the country dating back to the 1920s when it was still under British mandate.

According to the World Bank, Iraq has 145 billion barrels of proven oil reserves -- among the largest in the world -- amounting to 96 years' worth of production at the current rate.