The Battle For Market Share

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It’s been a while since I blogged about the Oil Price, and since my last note it does appear that things have stabilised and prices are slowly creeping up.

This is good news for for the Oil and Gas Industry and is starting to provide the comfort that producers need to start spending money on new plant again. In particular, it seems that refiners who profited most from the low oil prices early on and have a cash reserve available are starting to look at developing and upgrading their facilities for new and emerging markets.

They are also taking the opportunity to adapt refineries to be able to process heavier (cheaper but poorer quality) crudes and to meet more stringent EU and US fuel specifications.

This article from World Oil paints an interesting picture – a stand-off between those who were prepared to sell on even when oil prices plummeted and those that preferred to keep their oil in reserve and wait for higher prices to return.

 

 

History of Aramco

Jubail Power

Recently World Oil published a potted history of Aramco from one oil well to world’s most valuable company which is quite an interesting read.

Saudi Arabia’s state oil producer is in a league of its own. The world’s most valuable company, which supplies about one in every nine barrels of crude produced and runs refineries from the U.S. Gulf coast to the South China Sea, is preparing for an initial public offering to raise about $100 billion as soon as 2017.

One barrel in every nine – that’s an amazing statistic.

As I’ve mentioned before, I’ve worked on many projects for Aramco – in fact I’m currently working on the pre-FEED phase of my tenth Aramco job. I’ve also had the opportunity to travel to Saudi Arabia on several occasions.

New industry coming to Ras al-Khair

Here’s another interesting story from Saudi Arabia.

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State oil giant Saudi Aramco has extended bidding for dredging and reclamation work at its marine terminal in Ras al-Khair by almost one month, industry sources told Reuters on Wednesday.

Aramco (the national Oil company) are planning to build a large marine terminal in the east of the Country at a place called Ras al-Khair (RAK) – this is a place I know, as I’ve visited there when working on a project for the Saudi national mining company Ma’aden.

Ma’aden are in the middle of a major expansion of their operations in the north of the country (where large phosphate deposits exist) and intend to send some of the products and intermediates by rail to RAK (where they have a fertiliser and animal feed facility at the moment) for further processing and export.

Part of the Ma’aden project was to extend the jetty area around their facility, but this project is;

the first phase of a huge ship repair and shipbuilding complex in the east of the country seen as key in the kingdom’s economic transformation plan.

It’s certainly a prime area for development, with a large expanse of space surrounding the existing RAK port and industrial area. There are already some rail links but I expect these will be upgraded significantly once the marine terminal is built.

As well as the Ma’aden phosphate plant at the site, it’s not too far to other Aramco installations including Ras Tanura, Jubail and Khursaniyah (pictured above).

It’s interesting that Aramco are spearheading the project at this stage although the completed complex will be;

operated by a joint venture between Aramco, the National Shipping Company of Saudi Arabia (Bahri), United Arab Emirates-based Lamprell and South Korea’s Hyundai Heavy Industries.

I guess that a large project like this is the sort of thing Aramco has more experience of than any other entity in the Kingdom and when you look at the potential boost to the economy it’s not surprising that they want a piece of it;

Saudi Aramco has said it expects the complex, which is projected to create 80,000 jobs and allow Saudi Arabia to reduce its imports by $12 billion as well as increase gross domestic product by $17 billion, will be fully operational by 2021.

Aramco continues to diversify

gas ring

Saudi Aramco – Saudi Arabia’s national oil company (I have worked on their projects on 9 occasions since 2001) are in the news at the moment as they look to diversify and spread their investments across the World.

Two recent articles in Downstream Today outline such plans.

In the first Thai PTT and Saudi Aramco in Joint Vietnam Petrochemical Project, they are joining forces with the Thai energy company PTT (for whom I have also worked on a project) to submit plans for a $22bn 400,000 bpd Refinery and PetChem facility to be built in Vietnam.

In the second story Catalytic Processes Could Yield Alternatives to Refineries, Ethane Crackers a California-based company claims that it has found a commercially viable technique to directly convert natural gas into liquid fuels or petrochemical building blocks.

This is significant for two reasons – firstly transporting gas long distances is difficult and expensive, liquefied natural gas (LNG) facilities are costly and technically complex as are the ships that transport the fuel at -161 deg C.  Any process that can convert gas to liquid fuels more easily will be of real interest.

The second reason is that much of the gas, once re-vapourised is used as a Petrochemical feedstock anyway.  So if this process can make liquefaction easier, cheaper and provide the PetChem building blocks at the same time it could be a real money spinner.

The company in question, Siluria, announced that it raised more than $30 million in a financing led by Saudi Aramco Energy Ventures (SAEV) – the venture investment arm of Saudi Aramco.

This indicates the level of diversity – in processes, products and locations that Aramco are looking at.

Interesting times.

 

 

 

SATORP Reaches Full Production

Quick Note

 

I saw this report today that the SATORP refinery in Saudi Arabia reached it’s full 400,000 BPSD capacity last month.

A somewhat worrying comment from the report;

Europe’s refineries are too small and not sophisticated enough to compete with new plants, Chris Bake, executive director at Vitol, the world’s largest oil trader.

We’ll see.