Saudi oil minister warns of tight refining capacity

Sept. 14, 2006
Saudi Arabia's oil and gas investments will total some $70 billion during the next 5 years, said Saudi Minister of Petroleum and Mineral Resources Ali I. al-Naimi in a speech in Vienna Sept. 12. Much of that will alleviate constrained refinery capacity.

By OGJ editors
HOUSTON, Sept. 14 -- Saudi Arabia's oil and gas investments will total some $70 billion during the next 5 years, said Saudi Minister of Petroleum and Mineral Resources Ali I. al-Naimi in a speech in Vienna Sept. 12. Much of that will alleviate constrained refinery capacity.

Speaking before an Organization of Petroleum Exporting Countries international seminar, Al-Naimi said meeting global oil demand will require timely downstream investments.

"The industry must deal with a stretched refining system and match refining capacity to the anticipated future slate of crude oil that is becoming heavier and more sour, as well as attend to the infrastructure bottlenecks in pipelines, terminals, shipping, and critical sea channels," he said.

Al-Naimi said Saudi production capacity is estimated to reach 12.5 million b/d by 2009 compared with 11 million b/d earlier this year. The Kingdom is experiencing a drilling surge (OGJ Online, Apr. 16, 2006).

Saudi Arabia's downstream investments include the construction of two grassroots joint-venture export refineries, each with a capacity of 400,000 b/d.

One will be in Jubail on the kingdom's east coast and the other in Yanbu on the west coast. Saudi Arabia also plans to expand its Ras Tanura refinery, possibly transforming it into an integrated refining and petrochemical complex (OGJ, Feb. 13, 2006, p. 24).