China-based Sinopec Group and Saudi Arabian state-owned oil company Saudi Aramco have entered an agreement to build an oil refinery on the west coast of Saudi Arabia. Sinopec will hold a 37.5% equity interest in the joint venture, known as Yanbu Aramco Sinopec Refining Company (YASREF), and Saudi Aramco will hold a 62.5% stake.
YASREF was formed to complete the construction of the new oil refinery in Yanbu on the Red Sea coast, and to carry out its operations.
The project site covers approximately 5.2 million square metres, and 10% of the construction work has been completed. The facility will have a capacity to process approximately 400,000bpd of Arabian heavy crude oil, and will begin operations in the second half of 2014.
Once operational, the refinery will produce 90,000bpd of petrol, 263,000bpd of ultra-low-sulphur diesel, and byproducts including 6,200t per day of petroleum coke and 1,200t per day of sulphur. The YASREF project includes mega-processing units, utilities and interconnecting piping, associated crude oil and refined product storage, as well as the offsite facilities.
Sinopec chairman Fu Chengyu said the implementation of the YASREF project will usher in a new chapter for Sinopec's investment in refinery and petrochemical projects in Saudi Arabia.
Saudi Aramco will also build refineries in Indonesia and China, and will spend $200bn on expanding its refining capacity and exploring for oil and natural gas over the next decade, according to Bloomberg.