Saudi Aramco cancels major oil-to-chemical project with SABIC, focus shifts to Asia
The cancellation of the Ras al-Zour project, which aimed to build a 400,000-barrel-per-day refinery, was driven by uncertainties surrounding domestic demand. Originally announced in November 2022, the project would have converted 45% of the refinery's crude output into chemicals.
Saudi Aramco has halted plans for a multibillion-dollar oil-to-petrochemical joint venture with Saudi Basic Industries Corporation (SABIC), shifting its focus toward expanding operations in Asia, according to Bloomberg. The cancellation of the Ras al-Zour project, which aimed to build a 400,000-barrel-per-day refinery, was driven by uncertainties surrounding domestic demand. Originally announced in November 2022, the project would have converted 45% of the refinery's crude output into chemicals.
This move reflects Aramco's broader reassessment of its chemical sector investments, as the company places increasing emphasis on the Asian market. Aramco is pursuing several major deals in China, where demand for petrochemical products like plastics is expected to outpace that of gasoline and diesel amid the global energy transition.
Among its current ventures, Aramco is in talks to acquire a 10% stake in China’s Hengli Petrochemical Ltd., while exploring opportunities with two other Chinese firms. In 2023, the company secured a $3.4 billion stake in Rongsheng Petrochemical Co., positioning itself to meet long-term demand for Saudi oil in the region.
Meanwhile, three additional planned chemical facilities in Saudi Arabia—located in Jubail and Yanbu—are under review as Aramco reconsiders its domestic investments.
Written by: Derek Yong
Edited by: Rochelle Nguyen