HOUSTON: Saudi Aramco took the first steps to integrating a petrochemicals business into the United States鈥� biggest oil refinery, which is operated by its subsidiary Motiva Enterprises.
Aramco鈥檚 Chief Executive Amin Nasser signed memoranda of understanding (MoUs) worth $8 billion-$10 billion with Honeywell UOP and Technip FMC to study petrochemical production technology for use in a chemical plant the company is considering building at the Port Arthur refinery.
抖阴短视频鈥檚 Crown Prince Mohammed bin Salman, who was winding up a two-week visit to the United States, was present at the signing in Houston, Texas, on Saturday along with Saudi Energy Minister Khalid Al-Falih and US Energy Secretary Rick Perry.
鈥淭hese agreements signal our plans for expansion into petrochemicals,鈥� Motiva鈥檚 Chief Executive Brian Coffman said.
Aramco, which wants to develop its downstream business as the government prepares to sell up to 5 percent of the world鈥檚 largest oil firm in an initial public offering (IPO) this year, wants to use oil as a major petrochemicals feedstock.
Coffman also said Motiva was evaluating boosting the 603,000 barrel-per-day (bpd) Port Arthur refinery鈥檚 capacity to 1 million or 1.5 million bpd, which would make it the largest in the world.
The aromatics unit for which Honeywell UOP鈥檚 technology is being considered under one of the MoUs, would convert benzene and paraxylene, byproducts of gasoline production, into 2 million tons annually of feedstocks for chemicals and plastics.
The other MoU would allow Aramco to use Technip FMC鈥檚 mixed-feed ethylene production technologies in the United States. The technology would produce 2 million tons a year of ethylene, which is used to make plastics, Motiva said.
The final investment decision on setting up a multi-billion-dollar petrochemical plant at Port Arthur is not expected until 2019, and is 鈥渄ependent on strong economics, competitive incentives, and regulatory support,鈥� Aramco said in a statement.
Coffman did not provide a timeline for the possible expansion of the Port Arthur refinery鈥檚 crude oil processing capacity.
鈥淭hat鈥檚 something we鈥檙e evaluating, we鈥檙e studying for in the future,鈥� he said.
The 1.2-million bpd Reliance Industries refinery in Jamnagar, India, has the world鈥檚 largest crude oil processing capacity.
Aramco said last year that it would invest $18 billion in Motiva to expand the refinery and move into petrochemical production.
Other US companies, including Chevron Phillips Chemical Co. 鈥� a joint venture of Chevron Corp. and Phillips 66 鈥� and Exxon Mobil Corp, have recently opened plants, like the one Motiva is considering, to process ethane into ethylene.
Chevron Phillips is considering building a second ethane cracker on the Gulf Coast of Texas.
The price tag for a large ethane cracker is typically over $6 billion, according to analysts. In addition to taking refining byproducts, ethane crackers provide hydrogen for refineries to use in making motor fuels.