ISLAMABAD: ARAMCO and the Saudi Minister is pursuing a petrochemical
project instead of a refinery due to the change in ARAMCO’s strategy of
pursuing Crude-to-Chemical instead of investing in view refineries, sources said.
ARAMCO’s future strategy is based on the realization that reliance on refined petroleum products for transportation is going to decrease due to transition to greener technologies. In order to retain maximum profitability from each barrel of crude, ARAMCO is targeting to convert 70-80% of each barrel into chemicals. It has already started to invest in these technologies and has partnered with other players such as SABIC to become a leading player in petrochemicals industry. The Saudi side argued that a multi-billion-dollar petrochemical project would be more profitable for Pakistan, as well as its partners, as it would enable the country to incorporate more parts of the value chain.
The Saudi side expects that Pakistan would reach out to the Chinese and firm up their inclusion before a formal three-way partnership could be agreed.
For ARAMCO ,the important elements would be project financing, profitability,
right partner(s), incentives provided, location, scale and demand of the products in the
market.
The project would require a business case and a feasibility study to find out details such as rate on return and profitability. ARAMCO also prefers that the project is located near the demand centers-implying that it may be planned near Karachi (Petroleum Division indicated that Hub, or a site near Steel Mill could be appropriate in this regard.
On demand of petrochemical products, ARAMCO opined that while growing
economic needs of Pakistan would create sufficient domestic demand, ARAMCO and
its partners could potentially solve the issue of off-taking the surplus and selling the
products elsewhere, if needed.
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