Yasref oil refinery, a joint venture between Saudi Arabian Oil Co. and China Petroleum & Chemical Corp., is processing crude at full capacity of 400,000 barrels a day amid improving refining margins for the plant, its chief executive officer said.
The facility on Saudi Arabia’s Red Sea coast reached its output limits in July and currently produces 265,000 barrels a day of low-sulfur diesel and 91,000 barrels a day of 91-octane and 95-octane gasoline, Mohammad Alshammari said at a conference in Riyadh. Yasref’s refining margins have improved since August even as the global industry faces a significant capacity surplus, he said.
“I think we suffered back in August quite a dip in refining margin, but now we see them turning around,” Alshammari said in an interview later in the day. “Last month, we averaged much much better than August, and this month the numbers are much better. It’s still a tight-margin market.”
Regional Expansion
Middle Eastern oil producers such as Saudi Arabia have been expanding refining capacity to reduce costly imports of fuel needed to meet rising domestic demand and to produce cleaner- burning diesel that fetches premium prices in other markets such as Europe. Regional fuel imports are mainly gasoline and diesel, while exports from the Middle East include jet fuel, fuel oil and naphtha.
Yasref’s main international markets are Europe, Asia and Egypt, Alshammari said.
“Our target market for diesel is mainly Europe because we produce ultra-low-sulfur diesel that’s the cleanest diesel you can get,” he said. The plant’s output may put pressure on refining margins in Europe but probably not in Asia, he said.
Agencies
