Saudi Aramco and TotalEnergies sign $11bn deal to build Amiral petrochemicals complex

Saudi Aramco and France’s TotalEnergies have awarded contracts to build the $11 billion Amiral petrochemicals complex in the city of Jubail in the kingdom’s Eastern Province.

The awarding of the engineering, procurement and construction contracts for main processing units and associated utilities marks the start of construction work on the major project, following the final investment decision made in December 2022, the companies said on Saturday.

Aramco is the world’s largest oil-exporting company.

Integrated with the existing Saudi Aramco Total Refining and Petrochemical (Satorp) refinery in Jubail, the new petrochemical complex will house the largest mixed-load steam cracker in the GCC, with a capacity to produce 1.65 million tonnes of ethylene and other industrial gases annually.

This expansion is expected to attract more than $4 billion in additional investment in a variety of industrial sectors and create about 7,000 jobs directly and indirectly in Saudi Arabia.

The sectors that will benefit from the complex include carbon fibres, lubricants, drilling fluids, detergents, food additives, vehicle parts and tyres, the statement said.

The seven companies granted the contracts were Hyundai Engineering & Construction, Maire Tecnimont, Sinopec Engineering Group Saudi, Gulf Consolidated Contractors, Mohammed Ali Al Suwailem Trading and Contracting, Mofarreh Marzouq Al Harbi and Partners, and Mobarak M Al Salomi and Partners for Construction.

The agreements were formalised with a signing ceremony attended by Amin Nasser, president and chief executive of Saudi Aramco, and Patrick Pouyanne, chairman and chief executive of TotalEnergies, in Dhahran.

“As part of Aramco’s growth strategy, the project is anticipated to contribute to value-addition opportunities in the kingdom’s downstream ecosystem,” Mr Nasser said.

Saudi Arabia, the world’s biggest oil-exporting country, continues to ramp up its energy infrastructure by attracting investments and forging agreements with global players.

The current energy climate also provides an opportunity: based on current policies and market trends, crude demand will rise by 6 per cent between 2022 and 2028 to reach 105.7 million barrels per day, the International Energy Agency said last week.

This is projected to be supported by strong demand from the petrochemical and aviation sectors, the Paris-based agency said in its medium-term oil market report.

Aramco is also extending its reach beyond the kingdom. In March, Saudi Arabia said construction will begin on a major refinery and petrochemical complex in China.

Huajin Aramco Petrochemical Company is developing the complex, which can process 300,000 barrels of oil per day and a petrochemical plant capable of producing 1.65 million tonnes of ethylene and 2 million tonnes of paraxylene a year.

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The global petrochemicals market is projected to surpass $1 trillion by 2030, from an estimated $584.5 billion in 2022, expanding at a compound annual growth rate of 7 per cent from 2023, according to Grand View Research.

“This landmark [agreement] opens a new page in our shared history with Aramco … this expansion project reinforces the exemplary relationship that our two companies have enjoyed for several decades in the kingdom,” Mr Pouyanné said.

The Aramco-TotalEnergies partnership also comes on the heels of this week’s French-Saudi Investment Forum, which saw deals and initial pacts worth $2.9 billion signed for a number of key sectors, including energy.

In 2021, Aramco announced plans to target net-zero carbon emissions by 2050 after the kingdom said it aimed to neutralise its emissions by 2060.

As part of the oil company’s investment to expand capacity to 13 million bpd, Aramco is adding to its gas-processing capacity and eliminating liquid-burning in the kingdom.

Updated: June 24, 2023, 1:55 PM

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