Saudi Aramco Plans Big Boost in Capacity of 1200-km East/West Pipeline

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Saudi Aramco Plans Big Boost in Capacity of 1200-km East/West Pipeline

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Saudi Aramco, the world's largest exporter of crude oil, said this week that it planned to increase the capacity of the 1200 km oil pipeline from Dharan to Yanbu from 5 to 7 million barrels per day by the end of 2018. This would represent a 40 percent increase in production.

The company is also expanding refinery and petrochemical plants capacities in Yanbu on the Red Sea. The extra crude shipments would be used to service these various new units.

Saudi Aramco has discovered several new oil and gas fields during the past year. Khalid al-Falih, who was appointed energy, industry and mineral resources minister on May 7 and is also Aramco's chairman, said that despite low oil prices, the company has reached record levels of oil production and gas processing.

“There’s no let up in Aramco’s plans for downstream expansion, so this would help in making sure they eliminate any bottlenecks in shipping crude,” Edward Bell, a commodities analyst at lender Emirates NBD PJSC, told Bloomberg by phone from Dubai. “There’s room for considerable demand growth both domestically and for export.”