Saudi Arabia is making efforts to finance refining and petrochemicals in order to diversify its multi-decade dependence on crude oil. Saudi Aramco, a state-owned oil company, has invested in over $100 billion in refining and chemical projects, and is investing in a complex with Total SA valued at $9 billion. The efforts are being led by the crown prince of Saudi Arabia, with Saudi Aramco preparing for an IPO to help fund the region’s economic transformation.

According to data from the International Energy Agency, the demand for petrochemicals are on a growth streak that will spike faster than any other segment of the oil industry. Chemicals that are produced from crude oil are expected to represent approximately 33% of the jump in oil use by 2030, according to the Agency, and 50% of growth in demand by 2050.

A method to help facilitate the move from crude oil to refined and petrochemicals is by integrating refining with petrochemicals, as Saudi Aramco is planning. The company will use both gases and fuels from its refineries to optimize output of chemicals that are of higher value. Likewise, its collaboration with Total SA will accelerate production of raw materials and plastics for multiple industries, such as medical, construction and automotive.

Source: Bloomberg