Saudi Arabian Oil Company (Saudi Aramco) on Sunday said it planning to acquire Shell Saudi Arabia Refining Limited’s (Shell) 50 per cent share of the Sasref joint venture in Jubail Industrial City in Saudi Arabia, for $631 million.
The refinery has a capacity of 305,000 barrels per day with liquefied petroleum gas, naphtha, kerosene, diesel, fuel oil and sulphur being the main products produced at the plant, according to a statement from Saudi Aramco.
The sale is expected to complete later this year, subject to regulatory approval.
“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,” said Abdulaziz Al-Judaimi, Saudi Aramco‘s Senior Vice President of Downstream.
The development comes as Saudi Aramco focuses on expanding its global presence in the profitable downstream sector where demand for refining products such as plastics, digital devices is expected to go up. In March, it acquired a 70 per cent stake in Saudi Basic Industries Corporation (Sabic) for $69.1 billion to boost its presence in the downstream sector.
Saudi Aramco also reached an agreement to purchase a 17 per cent stake in South Korea’s oil firm Hyundai Oilbank for around $1.25 billion (Dh4.59 billion) last week to boost its presence in the refining sector.
The company is also investing in India’s $44 billion Ratnagiri petrochemical complex in partnership with Abu Dhabi National Oil Company (Adnoc).
“The refinery has operated with good reliability, and has an impressive safety record. We’re proud of what we have achieved together over the past four decades and will continue to explore new business opportunities,” said John Abbott, Shell Downstream Director speaking about the latest deal.