New 400,000bpd refinery in Yanbu, Saudi Arabia, will contribute to global capacity increase over next decade.

On January 14, Saudi Aramco and Sinopec signed an agreement in Dhahran for the formation of the Yanbu Aramco Sinopec Refining Company (YASREF) and Aramco announced its intention of increasing its global refining capacity to 8mbpd.

In a speech, Khalid Al-Falih, president and CEO of Saudi Aramco, said: “YASREF… will help to grow the domestic Saudi economy, and create new opportunities for local enterprises and entrepreneurs, including in the initial engineering, procurement and construction phases of the project.”

According to a company spokesperson, Saudi Aramco will have a 62.5% stake in the joint venture, with Sinopec holding the remainder.

“This ultra-modern, highly sophisticated grassroots refinery will process 400,000bpd of heavy crude oil, and convert every single crude oil molecule into high quality, clean transportation fuels which are in high demand and which meet the most stringent global standards,” Falih said.

“The facility’s location in Yanbu, next to two of our other refineries, is ideal for supplying both overseas markets and the fast-growing western region of the kingdom,” he added.

“In fact, over the next decade our total global refining capacity is expected to approach eight million barrels a day, as a result of the largest expansion today by any oil company in the world,” Falih said.

Aramco is currently in talks relating to investment in the expansion of the Fujian refinery in southeast China. During a speech, Fu Chengyu, Sinopec chairman, said his company receives around 800,000bpd of crude from Saudi Aramco.