* Economic slowdown forces Total, Aramco to change strategy
* Jubail meant to survive extremely low margin environment
By Ikuko Kurahone and Zaida Espana
LONDON, Feb 23 (Reuters) - The giant Jubail refinery in Saudi Arabia will now target to export middle distillates to Asia when it starts operating in 2013, according to a senior executive with the joint venture partner Total (TOTF.PA).
The 400,000 barrels per day (bpd) complex refinery, now under construction, had been meant to export gasoline to the United States and middle distillates to Europe since plans for construction were tabled in 2005.
But the economic slowdown since 2008 in many developed countries has reduced energy consumption, forcing French major Total and its partner state-run Saudi Aramco [SDABO.UL] to change the strategy, Daniel Lacombe, the vice president of the Jubail project said at the IP Week conference.
In the 2011 plan, gasoline from the refinery will be consumed locally in Saudi Arabia and middle distillates shipped to Asia as demand in the Middle East and Asia continues to grow.
“Gasoline, we are very confident. It will be consumed locally. Most of the export from Jubail will be jet (fuel) and diesel. The kingdom cannot afford them,” Lacombe told Reuters on the sidelines of the conference late on Tuesday.
“They will probably go to China and South East Asia,” he added, without specifying the volume.
Lacombe said the direct impact on the product market in the Atlantic basin will be very limited. But refining margins in Asia may come under pressure as distillates tend to be oversupplied in countries like Japan and South Korea.
The Jubail refinery is meant to survive an extremely low margin environment, keeping running costs lower than other developed countries.
Lacombe said construction was still on schedule and the plan to build the petrochemical multi-feed cracker near the Jubail refinery was “currently developing.”
“The construction (of the refinery) will be finished by the end of 2012 and oil-in in the first quarter of 2013,” he said.
The total cost of the refinery is seen at about $12.8 billion. Lacombe declined to confirm the figure but said: “It cannot be $20 billion.”
The refinery, due to start up in 2013, will produce around 190,000 bpd of diesel; 90,000 bpd of gasoline and 50,000 bpd of kerosene. (Editing by James Jukwey)