Sasref to start clean diesel exports by end Jan
Riyadh, January 10, 2010
State-run Saudi Aramco and Royal Dutch Shell are expected to start ultra-low sulphur diesel exports from their joint venture refinery by the end of January, a senior company executive said.
The commissioning of the new refining unit is likely to take place before the end of the month, Sasref executive vice-president Raja Ahmad Murad Bin Raja Bahrin told reporters on Sunday on the sidelines of a conference.
"We will ... hopefully start to export products by the end of January," he said. The unit was previously scheduled to come online at the end of 2009.
The cost of the upgrade at the 305,000 barrels per day (bpd) joint venture plant was valued at more than $400 million, Sasref president Abdulhakim Al-Gouhi said.
The unit, which makes the refinery the kingdom's first producer that complies with new environtmental standards, has the potential to produce up to 100,000 bpd of clean diesel, he said.
The clean diesel unit is part of a broader plan to upgrade and add new units to meet environmental standards at the plant in Jubail, on the Gulf coast of Saudi Arabia.
Earnings from processing crude this year are likely to be weak, similar to revenues gained from last year, Gouhi said.
"We think it is going to be the same (as last year), the cold weather has helped prices up, but how long will this continue. Probably just a few months, refinery margins in 2010 will be down, but hopefully they will pick up in 2011."
A sharp fall in fuel demand in the developed countries in 2009, which the International Energy Agency (IEA) estimated at about 2.1 million barrels per day in OECD nations, has slashed refinery profits from the levels seen in the five years to 2008.
Among leading financial institutions Citibank and Morgan Stanley have forecast a modest rise as global economic activities may boost oil product demand. But Societe Generale and JP Morgan Chase see significant spare capacity which will pressure margins for years to come. - Reuters