October 29, 2020

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Saudi Aramco signs joint deal to scale up and commercialize ‘groundbreaking’ crude to chemicals process

Saudi Aramco signs joint deal to scale up and commercialize ‘groundbreaking’ crude to chemicals process
Photo courtesy of Saudi Aramco.

Saudi Aramco, through its wholly-owned subsidiary Saudi Aramco Technologies, has signed a joint development agreement with CB&I, a U.S.-based leading provider of technology and infrastructure for the energy industry, and Chevron Lummus Global (CLG), for pilot use of a technology to convert crude oil to chemicals.

Under the agreement, 70 to 80% of crude intake will be converted into chemicals, with a goal to start commercialization of the process within two years.

“CLG’s hydroprocessing technologies and CB&I’s ethylene cracker technology combined with Saudi Aramco’s proprietary thermal crude to chemicals technology will provide a strong foundation for this joint development,” said CLG Managing Director Leon de Bruyn, “We are excited to be partnering with Saudi Aramco and making a positive impact on our industry by demonstrating an innovative approach to crude to chemicals.”

Saudi Aramco is intent on developing its downstream business as the government prepares to sell up to 5% of its shares in Saudi Arabia’s state-owned oil and gas company, the world’s largest, in an initial public offering (IPO) this year. The company has not yet announced which stock exchange it will launch its IPO.

The agreement, which is valued at USD 40 million, will serve to scale up and commercialize Saudi Aramco’s Thermal Crude to Chemicals (TC2C™) technology. This innovative technology has been pioneered at Saudi Aramco’s Research & Development Center over the past few years in order to enable higher chemical yield than previously achievable. The process bypasses conventional refining steps by employing a proprietary direct conversion process.

This proprietary technology is said to represent significant innovative progress and complements Saudi Aramco’s crude-to-chemicals conventional projects. The innovative and conventional approaches together will enable and accelerate the growth of Saudi Aramco’s Chemicals business, the company said.

In November, Saudi Aramco signed a preliminary deal with Saudi Basic Industries Corp. (SABIC) to build a chemicals complex to convert 45% of crude oil to chemicals directly.

The new, innovative technology would reduce capital costs by 30% compared to conventional refining, according to Saudi Aramco Chief Technology Officer Ahmad al-Khowaiter.

“This is a unique integration of advanced technology processes for the production of high-value petrochemicals from crude oil, and our three companies are best positioned to do so,” said Patrick K. Mullen, CB&I president and chief executive officer.

Saudi Aramco President and CEO Amin H. Nasser said, “Saudi Aramco is going beyond the quick wins and is instead prioritizing investments in groundbreaking R&D and technology. today’s joint development agreement with CB&I and CLG are a technological first which will position Saudi Aramco to maximize the value of each barrel of crude oil it produces in the near future.”

“This partnership will enable us to leverage the unique strengths of our companies to accelerate the scale-up and de-risking of the technology while reiterating Saudi Arabia’s global leadership in crude oil and commodities production. This will support the Kingdom’s efforts toward industrial diversification, job creation and technology leadership in Saudi Arabia through downstream conversion of chemicals,” Khowaiter added.

“The use of oil in the petrochemicals sector is likely to become a key source of oil demand growth in the 2020s — in fact, growing by more than 50% over the coming two decades,” Nasser added.

Saudi Aramco currently produces about 10 million barrels per day (bpd) of crude oil, with plans to raise its refining capacity to 8 million to 10 million bpd from around 5 million bpd today.

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