By Yaw Yan Chong
Saudi oil giant to close 400,000 bpd refinery for at least a month for routine maintenance, sources say.
Saudi Aramco will shut down its 400,000 barrels per day (bpd) Rabigh refinery for at least a month for routine maintenance from early next week, industry sources said on Wednesday.
The shutdown could last longer than a month because it also includes works that will link the plant to its new $10 billion joint-venture petrochemical complex with Japan's Sumitomo Chemical.
"The shutdown is largely to facilitate the tying up of the refinery to the new petrochemical plant and also include some routine maintenance works on the refinery," a Middle East-based source said.
The turnaround, initially to have started in the middle of this month, is expected to start on or around October 22, the source added.
Aramco produces all oil products, except gasoline, from the topping refinery, which has a yield of 38.1% of fuel oil, 19.4% of naphtha and 9.3% of middle distillates.
Most of the products are for domestic consumption except naphtha, which is mostly exported at around two million tonnes annually, sources said.
It last sold about 150,000 tonnes per month of the A316 naphtha grade, for October-March loading from Rabigh, at a premium of $14.00 a tonne, free on board (FOB) basis, down from $25.00 previously.
Most of the kingdom's fuel oil, which is used for power generation, also comes from the facility. Saudi Arabia uses rare low-metals fuel oil of the 380-centistoke grade.
The refiner is seeking up to two 80,000-tonne parcels of the product, of below 5 ppm aluminium, for November delivery to Rabigh.
The imports, rare outside Saudi Arabia's peak summer demand season between June and August, are part of a process to optimise profits in which Aramco sells its own cargoes into a tight Middle East market and buying back utility-grade fuel oil.
Traders said the imports could also be due to the shutdown.
The oil giant has set up a joint-venture firm, PetroRabigh, to build a petrochemical complex that will produce 18.4 million tonnes of oil products, 1.3 million tonnes of ethylene and 900,000 tonnes of propylene annually.
The plant is expected to be operational by second-quarter next year. Tied to the complex, the Rabigh refinery will also add 60,000 bpd of gasoline-producing capacity by 2008. - Reuters