Saudi Aramco Pauses Work on Chemical Expansion Projects, Shifts Focus to Existing Ventures
Saudi Aramco has halted progress on three planned expansion projects within its chemicals sector, opting instead to prioritize investments in existing international facilities and ongoing crude-to-chemicals conversions, the company indicated recently. The move signals a strategic recalibration amid shifting global demand and a focus on maximizing returns from current assets.
The paused projects represent a significant shift for the oil giant, which had previously signaled ambitious growth in petrochemicals. Aramco’s decision impacts planned expansions in Saudi Arabia, and reflects a current preference for investing in established markets like China and South Korea, close to major demand centers. This adjustment comes as Aramco plans to spend over $50 billion this year, largely on upstream gas projects and maintaining oil production capacity.
Currently, Aramco is proceeding with four crude-to-chemicals conversion projects, including two in China, one in South Korea, and a joint venture with TotalEnergies in Saudi Arabia, all slated for completion within the next three years.
Recent agreements underscore this strategic pivot. In April,Aramco signed a framework agreement with Sinopec and yanbu Aramco sinopec Refining Company (YASREF) to expand petrochemical projects at the YASREF refinery in Yanbu. Additionally, in December 2022, Saudi Basic Industries Corporation (SABIC), Aramco, and Sinopec signed a memorandum of understanding to assess the feasibility of a new integrated petrochemical complex in Yanbu Industrial City.
