Aramco buys Shell’s 50% stake in SASREF

Article by Adam Duckett

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.

Article by Adam Duckett

Editor, The Chemical Engineer

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