Booming demand from USA and China has pushed crude oil prices to record highs in 2004-2005. A lack of global refining capacity to meet this growing fuel demand in USA and Asia has triggered the price rise.
In a bid to cater to China's growing demand, Saudi Aramco plans to build an export-oriented refinery with a 400,000 bpd capacity in Yanbu, at an investment outlay of US$4 billion-US$5 billion. Yanbu is strategically located and the new refinery could supply the US East Coast with high-quality gasoline, low-sulfur diesel to Europe and naphtha to East Asia. India's Hindustan Petroleum Corp. Ltd. (HPCL) has held preliminary talks for a stake in the new Yanbu refinery. HPCL has also offered Saudi Aramco a stake in its Vishakhapatnam refinery which will double capacity to 300,000 bpd in three years
Also on the cards is Aramco's plan to revamp its Ras Tanura refinery at a cost of around US$4 billion-US$5 billion and adding a petrochemical complex. Aramco and Japan's Sumitomo Chemical Co. Ltd. are investing US$6 billion-US$7 billion to upgrade the Rabigh refinery and also build a petrochemical plant by 2008. Aramco is in talks with state-run Indian Oil Corp. for a stake in IOC's 180,000-bpd Paradip refinery, which is likely to be built by 2010.
07-Apr-05 
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