Arabian Gulf states are expanding their refineries to export more value-added products, to develop a downstream industry and diversify income away from oil and gas, and to meet rising local demand for fuels such as petrol.
The total capacity of Gulf refineries is forecast to increase to approximately 7.4 million barrels per day (bpd) by about 2022, a 70.5 per cent increase over the current 4.3m bpd capacity, according to the consultants Frost & Sullivan.
Saudi Arabia will remain dominant with a 45 per cent share and Kuwait will still hold second place with a 19.2 per cent share.
“In line with the GCC governments’ vision to gradually delink their GDP’s reliance on oil and gas prices, the investments in [the] downstream value-added sector have been witnessing a surge,” says Virein Kumar Yadlapalli at Frost & Sullivan.
“Refining and further downstream [oil and gas] industries such as petrochemicals, speciality chemicals and plastics, among others, have benefited.”
Saudi Arabia, the world’s biggest oil exporter, has been leading the way in building new refineries, which cater both to exports and local demand.
It partnered the French oil firm Total to build a 400,000 bpd refinery in the Gulf industrial city of Jubail last year, and China’s state-owned oil firm Sinopec to construct another 400,000 bpd refinery in the Red Sea industrial city of Yanbu. That facility began operations this year. Saudi Aramco is building another 400,000 bpd refinery in the Red Sea port city of Jizan that is due for completion by 2017.
The UAE has just finished doubling the refining capacity at Ruwais from 417,000 bpd, while Qatar is building a second 146,000 bpd condensate refinery in the industrial city of Ras Laffan.
Condensate is a light oil that is easy to convert into oil-based products.
Most of these new refineries are designed to make Gulf states self-sufficient, halting the imports of products such as petrol, and exporting excess production.
“The current projects within the GCC are based on a strategy from national oil companies to create the export refinery concept,” says Raheel Shafi, a senior consultant for the Middle East at Nexant, a consultancy firm.
“GCC refiners have taken a step further into the value chain of fuel supply to wider markets, effectively using the hydrocarbon reserves to provide very competitive cost structures to markets such as Europe where producers face issues when it comes to size and complexity of existing refining assets.”
The increase in refining capacity in the Gulf region is part of a model designed to focus on downstream industries to derive more value at a time when oil prices are less than US$60 a barrel. Brent has fallen by about 50 per cent since reaching $115 a barrel in June last year as Opec pumps crude at a time when US oil supply is still rising on the shale oil boom. Weaker demand in Europe and Asia, and a strong dollar have also contributed to the slide in oil prices.
“It is a business model that a number of people like to adopt, to have control of the whole supply chain from upstream all the way to downstream, to petrochemicals as well,” says Steve Sawyer, a downstream consultant at energy consultancy FGE.
“If there is a reduction in profit in one sector you can hopefully make it up in another sector and that is what is happening at the moment.
“Having that integrated supply chain network across all parts of the business helps you to smooth out any ups and downs in your cash flow.”
Saudi Arabia is one example of a country focusing on petrochemicals to develop a downstream industry and create much needed jobs.
Sadara Chemical, a $20 billion petrochemical joint venture between Aramco and the US multinational Dow Chemical, will use both gas and naphtha, derived from refined crude, to produce petrochemicals this year. All other Gulf petrochemical projects use gas as feedstock.
Sadara will produce certain complex chemicals for the first time in Saudi Arabia and will help create thousands of jobs, both directly and indirectly.
“After 2025 we expect more refineries to be built in the Middle East and the reason is that Middle East countries need the jobs, so it’s better to export finished products or value-added products rather than crude oil because that creates a lot of jobs locally,” says Mike Sarna, a downstream analyst at consultancy IHS. “You have direct jobs in a refinery of about 1,000 to 1,500 [jobs], but also it creates a lot of secondary jobs because a refinery requires a lot of supplies and material and contractors, and part of it could be local contractors.”
Besides the local agenda, refineries in the Gulf will have a direct impact on the international refining industry. All Gulf refineries are built to very high specifications such as the ability to process fuels with very low sulphur content that enables them to sell products anywhere in the world. Refineries that cannot compete with the size and complexity of the new Gulf refineries are likely to suffer.
“Directionally it [Gulf refinery expansion] will weaken refining margins. It depends by region,” says Alan Gelder, the head of Europe, Middle East, Africa, Russia and Caspian refining & chemicals research for Wood Mackenzie.
“The place least impacted by Middle East refining capacity is North America largely because of the distance and advantage they got on discounted feedstocks.”
Gulf exports of diesel could compete with Russian exports to Europe, while the Middle East could send more naphtha to Asia, analysts say. Africa will be also another key market for Middle Eastern refining products, such as diesel, analysts say.
“Asian refineries are generally smaller scale than the [typical]Middle East export refinery and have configurations that are more geared towards local specifications,” says Mr Shafi. “The Middle East refineries are export refineries retaining the flexibility of producing fuels of a wide variety of specifications.”
But the low oil price could mean that refineries yet to be built, such as Duqm refinery in Oman and Fujairah refinery in the UAE, face delays.
“All projects that are not currently under construction and that are in the planning or engineering stages are at risk of being delayed,” says Mr Sarna. “Those already in construction don’t have any problems.”
In addition, Gulf refineries will need to set up or beef up their trading arms to market and sell their new exports, which will be competing in a global market. Aramco Trading, for example, a wholly-owned unit of Saudi Aramco, is handling refined products marketing and will need to sell the new products globally.
“In the ramp up, they [trading arms] may well be selling products at a bit of a discount just to get rid of them, but once they are up and running it’s really making sure that they can run that refinery at a good utilisation level and find markets for the products,” says Mr Sawyer.
“The stronger the trading arm the better value they will have for those products, the more money will come in.”
dalsaadi@thenational.ae
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UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
Results:
5pm: Maiden (PA) | Dh80,000 | 1,200 metres
Winner: Jabalini, Szczepan Mazur (jockey), Younis Kalbani (trainer)
5.30pm: UAE Arabian Derby (PA) | Prestige | Dh150,000 | 2,200m
Winner: Octave, Gerald Avranche, Abdallah Al Hammadi
6pm: Arabian Triple Crown Round 3 (PA) | Group 3 Dh300,000 | 2,200m
Winner: Harrab, Richard Mullen, Mohamed Ali
6.30pm: Emirates Championship (PA) | Group 1 | Dh1million | 2,200m
Winner: BF Mughader, Szczepan Mazur, Younis Al Kalbani
7pm: Abu Dhabi Championship (TB) | Group 3 | Dh380,000 | 2,200m
Winner: GM Hopkins, Patrick Cosgrave, Jaber Ramadhan
7.30pm: Wathba Stallions Cup (PA) | Conditions | Dh70,000 | 1,600m
Winner: AF La’Asae, Tadhg O’Shea, Ernst Oertel
Sweet Tooth
Creator: Jim Mickle
Starring: Christian Convery, Nonso Anozie, Adeel Akhtar, Stefania LaVie Owen
Rating: 2.5/5
The specs
Engine: Single front-axle electric motor
Power: 218hp
Torque: 330Nm
Transmission: Single-speed automatic
Max touring range: 402km (claimed)
Price: From Dh215,000 (estimate)
On sale: September
TRAINING FOR TOKYO
A typical week's training for Sebastian, who is competing at the ITU Abu Dhabi World Triathlon on March 8-9:
- Four swim sessions (14km)
- Three bike sessions (200km)
- Four run sessions (45km)
- Two strength and conditioning session (two hours)
- One session therapy session at DISC Dubai
- Two-three hours of stretching and self-maintenance of the body
ITU Abu Dhabi World Triathlon
For more information go to www.abudhabi.triathlon.org.
Sukuk
An Islamic bond structured in a way to generate returns without violating Sharia strictures on prohibition of interest.
Herc's Adventures
Developer: Big Ape Productions
Publisher: LucasArts
Console: PlayStation 1 & 5, Sega Saturn
Rating: 4/5
Kill
Director: Nikhil Nagesh Bhat
Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal
Rating: 4.5/5
SPEC SHEET: APPLE IPHONE 14 PRO MAX
Display: 6.7" Super Retina XDR OLED, 2796 x 1290, 460ppi, 120Hz, 2000 nits max, HDR, True Tone, P3, always-on
Processor: A16 Bionic, 6-core CPU, 5-core GPU, 16-core Neural Engine
Memory: 6GB
Capacity: 128/256/512GB / 1TB
Platform: iOS 16
Main camera: Triple 48MP main (f/1.78) + 12MP ultra-wide (f/2.2) + 12MP telephoto (f/2.8), 6x optical, 15x digital, Photonic Engine, Deep Fusion, Smart HDR 4, Portrait Lighting
Main camera video: 4K @ 24/25/30/60fps, full-HD @ 25/30/60fps, HD @ 30fps, slo-mo @ 120/240fps, ProRes (4K) @ 30fps; night, time lapse, cinematic, action modes; Dolby Vision, 4K HDR
Front camera: 12MP TrueDepth (f/1.9), Photonic Engine, Deep Fusion, Smart HDR 4, Portrait Lighting; Animoji, Memoji
Front camera video: 4K @ 24/25/30/60fps, full-HD @ 25/30/60fps, slo-mo @ 120/240fps, ProRes (4K) @ 30fps; night, time lapse, cinematic, action modes; Dolby Vision, 4K HDR
Battery: 4323mAh, up to 29h video, 25h streaming video, 95h audio; fast charge to 50% in 30min; MagSafe, Qi wireless charging
Connectivity: Wi-Fi, Bluetooth 5.3, NFC (Apple Pay)
Biometrics: Face ID
I/O: Lightning
Durability: IP68, dust/splash/water resistant up to 6m up to 30min
Cards: Dual eSIM / eSIM + eSIM (US models use eSIMs only)
Colours: Deep purple, gold, silver, space black
In the box: iPhone 14 Pro Max, USB-C-to-Lightning cable, one Apple sticker
Price: Dh4,699 / Dh5,099 / Dh5,949 / Dh6,799
Leaderboard
15 under: Paul Casey (ENG)
-14: Robert MacIntyre (SCO)
-13 Brandon Stone (SA)
-10 Laurie Canter (ENG) , Sergio Garcia (ESP)
-9 Kalle Samooja (FIN)
-8 Thomas Detry (BEL), Justin Harding (SA), Justin Rose (ENG)
THE SPECS
Engine: 1.5-litre turbocharged four-cylinder
Transmission: Constant Variable (CVT)
Power: 141bhp
Torque: 250Nm
Price: Dh64,500
On sale: Now
COMPANY PROFILE
Company: Mascotte Health
Started: 2023
Based: Miami, US
Founder: Bora Hamamcioglu
Sector: Online veterinary service provider
Investment stage: $1.2 million raised in seed funding
The specs
Engine: Dual synchronous electric motors
Power: 646hp
Torque: 830Nm
Transmission: Two-speed auto (rear axle); single-speed auto (front)
Price: From Dh552,311; Dh660,408 (as tested)
On sale: now
SPECS
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
WITHIN SAND
Director: Moe Alatawi
Starring: Ra’ed Alshammari, Adwa Fahd, Muhand Alsaleh
Rating: 3/5
NEW ARRIVALS
Benjamin Mendy (Monaco) - £51.75m (Dh247.94m)
Kyle Walker (Tottenham Hotspur) - £45.9m
Bernardo Silva (Monaco) - £45m
Ederson Moraes (Benfica) - £36m
Danilo (Real Madrid) - £27m
Douglas Luiz (Vasco de Gama) - £10.8m
The Specs
Engine: 1.6-litre 4-cylinder petrol
Power: 118hp
Torque: 149Nm
Transmission: Six-speed automatic
Price: From Dh61,500
On sale: Now
The five pillars of Islam
COMPANY PROFILE
Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures
The specs
Powertrain: Single electric motor
Power: 201hp
Torque: 310Nm
Transmission: Single-speed auto
Battery: 53kWh lithium-ion battery pack (GS base model); 70kWh battery pack (GF)
Touring range: 350km (GS); 480km (GF)
Price: From Dh129,900 (GS); Dh149,000 (GF)
On sale: Now
ROUTE TO TITLE
Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2
Results
5pm: Handicap (PA) Dh80,000 1,400m; Winner: Faiza, Sandro Paiva (jockey), Ali Rashid Al Raihe (trainer).
5.30pm: Handicap (TB) Dh90,000 1,400m; Winner: Greeley, Connor Beasley, Helal Al Alawi.
6pm: Emirates Fillies Classic Prestige (PA) Dh100,000 1,600m; Winner: Marzaga, Jim Crowley, Ana Mendez.
6.30pm: Emirates Colts Classic Prestige (PA) Dh100,000 1,600m; Winner: Jawaal, Jim Crowley, Majed Al Jahouri.
7pm: Wathba Stallions Cup Handicap (PA) Dh70,000 1,600m; Winner: AF Ashras, Tadhg O’Shea, Ernst Oertel.
7.30pm: Handicap (PA) Dh80,000 2,200m; Winner: Somoud, Richard Mullen, Ahmed Al Mehairbi.
Fight Night
FIGHT NIGHT
Four title fights:
Amir Khan v Billy Dib - WBC International title
Hughie Fury v Samuel Peter - Heavyweight co-main event
Dave Penalosa v Lerato Dlamini - WBC Silver title
Prince Patel v Michell Banquiz - IBO World title
Six undercard bouts:
Michael Hennessy Jr v Abdul Julaidan Fatah
Amandeep Singh v Shakhobidin Zoirov
Zuhayr Al Qahtani v Farhad Hazratzada
Lolito Sonsona v Isack Junior
Rodrigo Caraballo v Sajid Abid
Ali Kiydin v Hemi Ahio
Forced Deportations
While the Lebanese government has deported a number of refugees back to Syria since 2011, the latest round is the first en-mass campaign of its kind, say the Access Center for Human Rights, a non-governmental organization which monitors the conditions of Syrian refugees in Lebanon.
“In the past, the Lebanese General Security was responsible for the forced deportation operations of refugees, after forcing them to sign papers stating that they wished to return to Syria of their own free will. Now, the Lebanese army, specifically military intelligence, is responsible for the security operation,” said Mohammad Hasan, head of ACHR.
In just the first four months of 2023 the number of forced deportations is nearly double that of the entirety of 2022.
Since the beginning of 2023, ACHR has reported 407 forced deportations – 200 of which occurred in April alone.
In comparison, just 154 people were forcfully deported in 2022.
Violence
Instances of violence against Syrian refugees are not uncommon.
Just last month, security camera footage of men violently attacking and stabbing an employee at a mini-market went viral. The store’s employees had engaged in a verbal altercation with the men who had come to enforce an order to shutter shops, following the announcement of a municipal curfew for Syrian refugees.
“They thought they were Syrian,” said the mayor of the Nahr el Bared municipality, Charbel Bou Raad, of the attackers.
It later emerged the beaten employees were Lebanese. But the video was an exemplary instance of violence at a time when anti-Syrian rhetoric is particularly heated as Lebanese politicians call for the return of Syrian refugees to Syria.
SHAITTAN
Director: Vikas Bahl
Starring: Ajay Devgn, R. Madhavan, Jyothika, Janaki Bodiwala
Rating: 3/5
Profile box
Founders: Michele Ferrario, Nino Ulsamer and Freddy Lim
Started: established in 2016 and launched in July 2017
Based: Singapore, with offices in the UAE, Malaysia, Hong Kong, Thailand
Sector: FinTech, wealth management
Initial investment: $500,000 in seed round 1 in 2016; $2.2m in seed round 2 in 2017; $5m in series A round in 2018; $12m in series B round in 2019; $16m in series C round in 2020 and $25m in series D round in 2021
Current staff: more than 160 employees
Stage: series D
Investors: EightRoads Ventures, Square Peg Capital, Sequoia Capital India
Killing of Qassem Suleimani
Warlight,
Michael Ondaatje, Knopf