Saudi Plans to be Second Largest Exporter of Refined Oil Products

JAZAN--Saudi Arabia plans to become the world's second largest exporter of refined oil products in 2017 as part of its drive to diversify its economy and increase its share of the global crude and petroleum products markets, the country's Oil Minister Ali al-Naimi said on Wednesday.

"We are no longer limited to exporting crude oil," Mr. al-Naimi told a press conference in the port city of Jazan, southwest Saudi Arabia.

The country's two new refineries--which will add 800,000 barrels a day in refining capacity this year--and the planned 400,000-barrel-per-day oil refinery in Jazan will bring Saudi Arabia's refining capacity to more than 3 million barrels a day.

"That will make the kingdom one of the five largest countries in the world in terms of refined crude capacity and the second largest exporter of refined products after the U.S.," Mr. al-Naimi said.

Mr. al-Naimi didn't give a timeline of when the Jazan refinery will be completed, but Suleman Al-Bargan, general manager of the refinery complex, said on Tuesday it will be finished in 2017.

Saudi Aramco and its subsidiaries own or have equity interest in domestic and international refineries with a total worldwide refining capacity of 4.9 million barrels per day, of which its equity share is 2.6 million barrels a day, making it the world's sixth largest refiner, according to its website.

The company exported 331,500 barrels of refined products a day in 2013, according to its annual review. The U.S. exported 2.66 million barrels a day of refined products in 2013, according to the U.S. Energy Information Administration.

Planning for the Saudi refineries began around a decade ago and are aimed at meeting the growing domestic fuel demand, as well as provide jobs. Domestic demand hasn't grown as quickly as expected, but as prices for Saudi Arabia's unprocessed oil have slumped--crude prices have more than halved internationally since last summer--the refineries could offer a profitable alternative source of income.

Last year, Saudi Aramco began output at one of the largest oil refineries built in recent years--a 400,000-barrel-a-day project in a joint venture with Total SA.

Another 400,000 barrels per day plant in Yanbu, a joint venture with China's Sinopec called Yasref, started trial runs in September and exported its first shipment in January.

Aramco has previously said it plans to increase its refining capacity to 8 million barrels per day in the next decade through expansion both at home and abroad.

In 2012, Aramco set up a trading arm to trade and sell products directly to refiners and has since opened offices in Europe and Singapore to sell products.

(Ahmed Al Omran contributed to this report.)

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