July 22, 2019 [Vestnik Kavkaza] – As The American Conservative writes in the article Saudi Arabia Controls North America’s Largest Oil Refinery, the change of ownership, completed in 2017, should give the oil giant the ability to pump more Saudi crude into North America, ahead of its IPO, planned for some time in 2020 or 2021.
Saudi Arabia is America’s second-largest source of crude oil, behind Canada, according to the Energy Information Administration.
The Gulf Coast facility had previously been co-owned by Royal Dutch Shell’s Motiva Enterprises.
Shell announced in a press release Monday that the two oil companies had completed the deal to separate assets, begun in March 2016. Saudi Aramco, through its wholly owned Saudi Refining, Inc. subsidiary, will assume full ownership of Motiva Enterprises, the refinery at Port Arthur, Texas, and 24 distribution terminals. As part of the deal, Motiva can exclusively sell “Shell-branded gasoline and diesel in Georgia, North Carolina, South Carolina, Virginia, Maryland and Washington, D.C., as well as the eastern half of Texas and the majority of Florida.”
Despite Saudi ownership of the highest volume refinery in North America, American companies refine by far the largest number of barrels of oil in the U.S. per day, occupying the top six slots on the table below. Before its acquisition of Port Arthur, Aramco came in a distant 11th place for number of barrels of oil refined per day in the U.S., according to data collected by the U.S. Energy Information Administration.
Though U.S. oil exports have increased rapidly in recent years, to approximately 7.6 million barrels per day in 2018, U.S. oil imports have remained steady around 10 million barrels per day. Forty three percent of U.S. oil imports come from Canada, and 9 percent from Saudi Arabia. These countries make up the number one and two slots for top U.S. imports.
In addition to their recent U.S. acquisition, the Saudis have also agreed to set up a $10 billion oil refinery in Pakistan, and they are in talks to spend another $10 billion in South Africa to build an oil refinery and petrochemical plant there.
Saudi Arabia has set its sights on a $2 trillion valuation for Aramco’s initial public offering. The Trump administration’s decision to push for American energy independence, coupled with low oil prices and the Kingdom’s notorious spending, makes the Aramco IPO valuation stakes that much higher for the Saudis.