State-owned Saudi Aramco is facing delays in the construction of its 400,000 barrel per day Jizan refinery, which is now planned to start up by the end of this year instead of May. Some contractors say the commissioning of the facility, located on the Red Sea, might even be pushed into next year.
Late last year, industry sources told Energy Intelligence that the refinery was almost 90 per cent complete and that pre-commissioning was due to begin sometime in May. However, further delays on the project’s construction are now pushing back the pre-commissioning phase until the end of the year, sources report. Saudi Aramco declined to comment.
The delay comes at a time when the kingdom has been cutting its oil production beyond the target set by Opec and its non-Opec partners in their joint supply curb pact in an attempt to lead the group by example and place pressure on other members to follow suit in a bid to boost prices. If the Jizan refinery were to have started operations in May, it would have created more internal demand for crude output.
The Jizan refinery project is part of Aramco’s plans to boost high-value exports of hydrocarbon products and breathe life into the southwestern region of the kingdom by building an economic hub that will help create thousands of jobs for Saudis. The initial plan was for the refinery to be completed by 2016.