Saudi Aramco has canceled plans to build a refinery and chemicals project in the kingdom and is reviewing three others as it evaluates spending plans with a focus on expanding in Asia.
Aramco and its unit Sabic will not go ahead with the planned 400,000 barrel-a-day facility at Ras Al Khair on Saudi Arabia’s Gulf coast, and a proposal to move the project to Jubail has also been shelved, according to people with knowledge of the situation.
The cancellation is a sign Aramco is recalibrating its spending on chemicals to Asia, where it’s pursuing a series of deals in China that would also guarantee long-term demand for Saudi crude. Aramco sees the use of goods such as plastics outlasting the growth in consumption for gasoline and diesel amid the energy transition, with much of the expansion in chemicals likely coming from Asia.
Uncertainty over the strength of demand in Saudi Arabia — where Aramco is already expanding other chemical sites — is also a factor forcing the company to reconsider spending on mulitbillion-dollar infrastructure projects, according to the people, who asked not the identified because the information isn’t public.
Three planned chemical facilities in Jubail and at Yanbu on the Red Sea are being checked to determine whether the company will go ahead with the investments, the people with knowledge of the plan said.
Aramco’s media office didn’t answer emailed questions seeking comment.
