SAUDI ARAMCO is buying Shell’s 50% share of the SASREF joint venture in Jubail Industrial City, Saudi Arabia for US$631m.
SASREF, which was founded in 1981, operates a 305,000 bbl/d refinery in Jubail. The purchase supports Saudi Aramco’s plans to increase refining and grow its downstream activities.
Abdulaziz Al-Judaimi, Saudi Aramco‘s Senior Vice President of Downstream said: “Saudi Aramco will take full ownership and integrate the refinery into its growing downstream portfolio. SASREF will continue to be a critical facility in our refining and chemicals business and we look forward to further optimising its performance and long-term viability.”
Shell is selling the stake as part of a wider divestment programme. Following the purchase of BG Group in 2015, Shell committed to sell off US$30bn worth of assets to 2018, and has now set targets to sell off another US$5bn to 2020.
Saudi Aramco’s purchase follows the agreement last week to buy a 17% stake in South Korean refiner Hyundai Oilbank, extending the international outlets for its crude oil.
It has paid around US$1.25bn for the stake in Hyundai Oilbank. The private company’s major facilities are located at the Daesan Complex, where it runs a fully-integrated refinery with a processing capacity of 650,000 bbl/d.
Al-Judaimi said: “The investment supports Saudi Aramco’s broader downstream growth strategy, as well as providing long-term crude oil placement supply options and product offtakes as part of our trading business.”
Seeking to secure customers for is Arabian crude, this year Saudi Aramco signed a crude supply deal with Polish refiner PKN Orlen, and agreed to acquire a 9% stake in Zeijang Petrochemical’s refining and petrochemicals complex in Zhoushan, China. It follows the high-profile agreement last year to take joint ownership of Petronas’ RAPID complex, with Saudi Armco contributing the first delivery of crude in September.
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