Saudi Aramco has shut down its crude oil refinery in Jeddah, which is considered one of the Kingdom’s oldest as it was established 50 years ago, converting the complex into a hub for oil products distribution.
The company is seeking to eliminate refining operations in the industrial complex south of Jeddah while maintaining the operation of other facilities in order to achieve a continuous supply and reliable and efficient petroleum products for Makkah.
The refinery has a production capacity of 80,000 barrels per day, accounting for 2.7 percent of the Kingdom’s total refining capacity.
Aramco said, in a statement, it had decided to convert the complex into a distribution center to improve the performance of its facilities in line with its strategic objective of maintaining the reliability of energy supplies on the highest standards.
The plant, which started operations in 1967, served less than 20 percent of demand from the Makkah region, western Saudi Arabia, and its closure will increase demand at other Saudi facilities.
Aramco will supply the Makkah region with petroleum products from its facilities in Yanbu and Rabigh instead of the one in Jeddah until the Jazan refinery starts operations in 2018.
The expected operation of the Jazan refinery, along with newly launched refineries such as Yasref in Yanbu and Satorp in Jubail, will provide more refining capacity to meet domestic demand with a total capacity of 1.2 million barrels per day.
The refinery has seen a decline in demand for fuel, Aramco’s senior vice president of downstream Abdulaziz al-Judaimi said, adding that the complex’s proximity to residential areas and its economic inefficiency have prevented its expansion.
He noted that Aramco currently has a number of large-scale development projects underway to supply petroleum products to the Makkah region, including the establishment of a refined petroleum products collection and pumping center in Yanbu, the construction of pipelines from Yanbu to Jeddah and the expansion of the North Jeddah distribution plant in Bremen.