Saudi - Trump: A Trillion Dollars In Deals In Two Days? -- May 14, 2025

Locator: 48624SAUDI.

Updates

8:04 a.m. PT, May 14, 2025: I asked the same question for Oracle and Broadcom and got surprising answers. LOL. 

8:02 a.m. PT, May 14, 2025: how investors can use ChatGPT -- I simply used "option-space bar" to open. my ChatGPT on my laptop while lying in bed, and asked the question (see below) and ChatGPT gave me this answer:

8:00 a.m. PT, May 14, 2025: I came across this after I posted my notes below.

Original Post

Saudi photo-ops: must see. One of many examples.

US LNG handshake Louisiana LNG project; link here.

NVDA:

• CEO announces chip deal with Saudi-backed Humain
• to power 500MW AI data center,
• scaling to 1.9 GW by 2023

AMD: hits a three-month high; link here;

• AMD joins Saudi firm Humain
• $10-billion push to build AI infrastructure

Humain:

• website; front page pretty stale;
• Nvidia
• AMD
• QCOM;
• AWS;

From ChatGPT, Humain: Saudi Arabia's state-backed AI powerhouse.

Mohammed bin Salman under the Public Investment Fund (PIF). As part of Saudi Arabia’s Vision 2030 initiative, HUMAIN aims to position the Kingdom as a global leader in AI by developing comprehensive AI infrastructure, including advanced data centers and Arabic-language AI models. The company has announced strategic partnerships with tech giants like NVIDIA, AMD, and AWS to build AI “factories of the future” and enhance the nation’s digital capabilities 

The stories continue to come.

• Trump’s trip to the Middle East
• deals worth a trillion dollars in two days
• Saudi Arabia surges in global influence;
• Trump removes sanctions on Syria
• huge deals with Qatar: Qatar to buy more Boeing jets. Says relationship with US reaches new highs.

Saudi Arabia's Motiva Update -- The Book Page -- "In Defense Of Partnership" -- Julian E. Zelizer -- February 11, 2025

Locator: 48540MOTIVA.

Refining: link here.

From the linked article (I'm kind of surprised Charles Kennedy didn't write this article):

While some U.S. refiners are scaling back, Saudi Arabia’s Motiva Enterprises just made a power move. The Saudi Aramco-owned refinery in Port Arthur, Texas, has quietly expanded its capacity, now processing a record 654,000 barrels per day—officially making it the largest refinery in the United States above Exxon’s Beaumont and Marathon’s Galveston Bay.

Motiva pulled this off without a flashy billion-dollar project—just good old-fashioned optimization, removing bottlenecks in the system to squeeze out more production. And they did it at a time when smaller, less efficient refineries are dropping like flies. LyondellBasell’s Houston plant is closing. Phillips 66’s Los Angeles refinery is shutting down.

Unlike its smaller refining peers, Port Arthur is doubling down, proving that size absolutely matters in refining.

Motiva’s expansion fits into a bigger industry shift, where mega-refineries are getting even bigger while smaller plants either shut down or pivot to biofuels. The rationale? If you can’t be nimble, be massive. And while U.S. refiners whine about demand uncertainties and ESG pressures, Aramco isn’t here to play defense—it’s here to dominate.

The real question now is whether Motiva will finally pull the trigger on its long-rumored petrochemical expansion.

Back in 2021, Aramco was considering pouring $6.6 billion into turning Port Arthur into a full-fledged petrochem hub—a move that would’ve put the plant even further ahead of its competition. That plan seemed to fizzle out, but given this latest expansion, it might just be back on the table.

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The Book Page

Rivian: despite all the spin by talking heads about how great Rivian is doing especially now that Rivian has been given the go-ahead to sell its vehicles to all comers, the ticker is not reflecting that great news --

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The Book Page

Link here. 

From Amazon:

Partisanship is a dirty word in American politics.

If there is one issue on which almost everyone in our divided country seems to agree, it’s the belief that the intense loyalty within the electorate toward Democrats and Republicans is the source of our democratic ills—division, dysfunction, distrust, and disinformation.

The possibilities that responsible partisanship can offer were at the heart of an important intellectual tradition that flourished in the 1950s and 1960s, one which was institutionalized through a sweeping set of congressional reforms in the 1970s and 1980s.

In Defense of Partisanship reimagines what partisanship might look like going forward from today. A new era of party-oriented reforms has the potential to pay respect to the deep differences that divide us—simultaneously creating a more functional path on which two responsible political parties compete to shape policy while still being able to govern.

The author: 

Julian E. Zelizer is the Malcolm Stevenson Forbes, Class of 1941 Professor of History and Public Affairs at Princeton University, a CNN political analyst and a contributor to NPR’s "Here & Now." He is the author and editor of numerous books, most recently Myth America and Burning Down the House. He lives in New York City.

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SpaceX Launches

February 11, 2025

SpaceX Falcon 9 from Cape Canaveral: successful.

 

So, Just Where Do US Oil Refiners Stand? June 21, 2023

Locator: 44998REFINERS. 

We're gonna hit another record this year! Take this to the bank! 

• 18.3 + 0.25 = 18.55
• 18.98 - 18.55 = 0.43 = 2.3%.

Link here to Reuters.

HOUSTON (Reuters) -

U.S. crude oil refining capacity has reversed two years of declines and climbed by more than 100,000 barrels, to 18.1 million barrels per day. This year’s 18.1 million bpd capacity remains below the 18.98 million bpd peak in 2019.

During the first two years of the COVID-19 pandemic, processing capacity to produce gasoline, diesel and jet fuel fell 5.4% ...

..... prices surged, Biden demanded prices come down and refiners responded by increasing capacity ...

Increases reflect capacity expansions at Marathon Petroleum and Citgo Petroleum.

The total does not include a 250,000 bpd increase that came after the cutoff date at Exxon Mobil’s Beaumont, Texas refinery in March of this year. The Beaumont expansion, the largest addition to a U.S. refinery in more than a decade, pushed the total to about 18.3 million bpd, still shy of the 2019 peak.

Marathon Petroleum Corp remains the nation’s largest refiner, with its Garyville, Louisiana, refinery now the nation’s third largest with 596,000 bpd capacity.

Marathon’s 2.9 million-bpd crude oil refining capacity represents 16% of the nation’s total.

Valero Energy Corp remains the second-largest U.S. refiner by volume with its 2.1 million bpd capacity equal to 12% of the U.S. total.

Motiva Enterprises, which operates the 626,000-bpd Port Arthur, Texas, refinery, operates the single largest refinery by capacity in the U.S. with Exxon’s Beaumont plant just behind it. Motiva is the U.S. refining arm of Saudi Aramco.

Citgo Petroleum Corp’s Lake Charles, Louisiana refinery grew by 37,000-bpd to 455,000-bpd.

The increase comes as cars and trucks are switching to renewable fuels and rechargable batteries instead of fossil fuels to reduce rising global temperatures from climate change.

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Christopher Nolan Filmography

The films:

• Following (1998)
• Memento (2000) 
• Insomnia (2002) 
• Batman Begins (2005) 
• The Prestige (2006) 
• The Dark Knight (2008) 
• Inception (2010) 
• The Dark Knight Rises (2012) 
• Interstellar (2014) 
• Dunkirk (2017) 
• Tenet (2020) 
• Oppenheimer (2023)

This Simply Blows Me Away -- Are Folks Paying Attention? July 14, 2022

I always get the impression that many (most?) Americans don't realize how tight global supplies of crude oil and natural gas are. 

In this case, either Saudi Arabia does not have the crude oil or Saudi Arabia does not have the capacity to produce more fuel oil.

It also explains why Saudi Arabia does not want to "lose" Russia as a member of OPEC+. 

Bottom line: Saudi Arabia needs oil or refined oil products to produce electricity to meet air conditioning demand.

From The Daily Star, originally an exclusive from Reuters that is now not accessible due to a paywall:

• Saudi Arabia more than doubled the amount of Russia fuel oil it imported in 2Q22
• purpose: feed power stations too meet summer cooling demand and free up the kingdom's own crude export
• obviously little spare capacity in Saudi Arabia
• import numbers:
• 647,000 tonnes (48,000 bbls per day) of fuel oil from Russia (April - June, 2022)
• up from 320,000 tonnes in the same period last year
• for the full year 2021, Saudi imported 1.05 million tonnes of Russian fuel oil
• Saudi's summer burn:
• 600,000 bpd in summer months;
• 300,000 bpd in winter months;
• increased use of natural gas has reduced the amount from as much as one million bpd in 2010
• much more at the link

The article is archived.

Elsewhere:

Oil-fired power generation has roared back this year, burning crude and products to meet strong growth in electricity demand. For Saudi Arabia and Iraq, April fuel oil and direct crude use jumped by 270 kb/d month-on-month.

US Supreme Court Rules In Favor Of PennEast Pipeline -- June 29, 2021

Pipelines: US Supreme Court sides with PennEast regarding eminent domain and pipelines. Link here. 

Ruling leaves in place longstanding pipeline routing practices. Pipelines had feared state veto power on condemnation. Google the blog for occasional notes regarding PennEast. Also, link here. Note how close this vote was: one judge could have overturned this.

The court ruled 5 - 4 that a pipeline company can use federal eminent domain authority to build a line across state-owned land and private lands where easements have been granted by states. This suggests that states can't have it both ways: an easement for a state-approved pipeline but not a permit for a federally permitted pipeline using the same easement.

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No Deal
Saudi - Sempra - Port Arthur

See "Saudi Arabia in transition" from yesterday, June 28, 2021.

Today, over at SeekingAlpha, "Sempra, Saudi Aramco unable to seal deal tied to Port Arthur LNG." Also here.

That explains why this:

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The Yolk's On Goober

Link here. 

Making America Great Again -- Saudi Aramco Looking At Chemical Plant Addition At Port Arthur -- April 7, 2018

From Reuters:

• a multi-billion dollar plan
• subsidiary Motiva Enterprises LLC
• parties involved: 
• Honeywell - an aromatics unit; would convert benzene and paraxylene into feedstocks for chemicals and plastics; would produce 2 million tons of feedstock
• Technip FMC - to produce polymers from ethane; would produce 2 million tons of ethylene from ethane, then used for plastics
• benzene, paraxylene: byproducts of gasoline production

Related news at this link.

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SolarCity: An Albatross

The albatross:

• Tesla owns SolarCity
• the $2 billion purchase came with almost $3 billion in debt
• "huge chunk" of interest coming due soon
• [again, typical article: "huge chunk" not defined; and date coming due was not provided] 
• Tesla doesn't guarantee repayment; SolarCity does (this is called non-recourse debt for Tesla)
• but, the SolarCity debt affects Tesla's overall credit rating and impacts borrowing costs
• Tesla has $10 billion of total debt outstanding; $3 billion is non-recourse, mostly Solar City debt
• without SolarCity, Tesla's borrowing ratings might be closer to 5.9% (single B rating)
• with SolarCity rating, a B- rating/Caa1 rating, closer to 7.2%
• story at Fortune through YahooFinance

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EIA: US Crude Oil Production Grew By 5% Last Year

That Wasn't Supposed To Happen -- Hubbert

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How To Load A Bobcat On To A Dump Truck

For newbies: the Bobcat is a North Dakota product, and still manufactured in North Dakota.

The Energy And Market Page, T+312 -- November 29, 2017

From Bloomberg:

America’s largest oil refinery, located in Port Arthur, Texas, is owned by Saudi Arabia’s state-run oil company, Aramco, and since it first bought a stake in 1988, the Motiva refinery guaranteed the kingdom a strategic foothold in the world’s largest energy market.

The tankers carrying millions of barrels a month of Arab Light crude from Saudi export terminals to Port Arthur were testament to the strength of the energy and political ties binding Riyadh and Washington.

All of a sudden, there are very few Saudi ships arriving in Texas. Since July, Aramco has constricted supply, attempting to drain the crude storage tanks at Motiva -- and many others across America -- part of a plan to lift oil prices, even at the cost of sacrificing its once prized U.S. market.

While Motiva is most affected, the rest of the U.S. oil refining system, from El Segundo in California to Lake Lake Charles in Louisiana, has also taken a hit.

The result: Saudi crude exports into America fell to a 30-year low last month.

"The drop is huge," said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. in London. "It’s not just that Saudi exports are low, but they have been low for several months.

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Jumpers and Hunters

Had I "sped-read" a passage in the the biography of Siegfried Sassoon I would have missed this passage describing Sassoon's enlistment with the cavalry unit, the 1st/1st Sussex Yeomanry:

Sassoon, who brought his precious hunter Cockbird with him, in their desperation to keep the few horses they had managed to requisition , are reputed to have hidden them in cellars.

In context, one can quickly figure out what a "hunter" is. But I did not know more than that.

For those interested in "hunters" vs "jumpers," see this link.

USA Today Reports On Saudi Aramco - Shell Split; Saudi Aramco Now Owns Largest Refinery In US -- March 20, 2016

USA Today reports that Saudi Arabia now owns the largest refinery in the US. I track this story here.

The report sheds more light on the background to this "breakup":

Reuters reported that the relationship started to fray after Motiva announced a $10 billion expansion of the Port Arthur refinery, doubling its capacity to 603,000 barrels per day, making it America’s largest refinery. It produced gasoline, diesel and jet fuel. A leak shortly after the expansion was completed in 2012 led to ballooning costs, exacerbating tension between Shell and Aramco. A 2015 workers strike also sparked anger between the two companies.

The two companies signed a nonbinding letter of intent, a plan that would divide up Motiva’s refineries between them. The refineries have a combined capacity of 1.1 million barrels per day and are all located close to each other. The breakup will allow Saudi Aramco to take over the Port Arthur refinery and 26 distribution terminals, and Aramco will also hold onto the Motiva brand name. Shell will take over the other two refineries, Convent and Norco, both located in Louisiana. Shell said that it would operate the two refineries as one plant with a combined throughput of 500,000 barrels per day.

This is obviously a different spin or emphasis than the one I suggested earlier: Saudi Aramco is in early stages of monetizing its assets. So we will see how this plays out.

And there it is, at the end of the USA Today article:

The split will hand the largest U.S. refinery to the state-owned Saudi oil company. The Wall Street Journal speculates that it could also pave the way for some sort of listing of Aramco’s assets in a public offering, something that Saudi officials have alluded to for several months. Few expect Aramco to list its upstream production assets in Saudi Arabia; downstream assets are much more likely to be offered up.

This article fails to note what else Saudi Aramco got in the deal, which in some ways may be just as important, if not more important. Saudi Aramco also got:

• the Motiva name
• retain 26 distribution terminals
• maintain an exclusive, long-term license to use the Shell brand for gasoline and diesel sales in Texas, the majority of the Mississippi Valley, the US southeast, and the US mid-Atlantic markets

In the short-term, Americans won't notice any difference, but it would not surprise me to see Motiva-branded service stations in the US.

Wiki lists the largest refineries in the US; the list does not include the Whiting BP refinery in Indiana. Wiki says that that refinery has a capacity of more than 400,000 bopd; Whiting says it has a capacity of 430,000 bopd, making it the sixth largest refinery in the US.

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The Apple Page

We are one step closer to buying an AppleWatch for May. She has an iPhone; I do not. I have said I will never get an iPhone, but the AppleWatch is so enticing, I could imagine getting an iPhone just to get an AppleWatch.

For the first time in a long time we visited the Apple store here in Southlake, TX.

We went in Saturday afternoon; there were seven ahead of us waiting to see Apple Watches, estimated to be a 15-minute wait, so we changed our mind and went back later.

Last evening, about 7:30, we were #4 in line for AppleWatches so decided to stay. The wait was about fifteen minutes but there is always plenty to do while waiting; sort of like waiting in an automobile showroom.

During the visit I told Austin I had not seen any change in the Apple retail stores even after Angela Ahrendts from Burberry took over responsibility for the stores in 2014. I suggested maybe her presence was being felt at the larger, more "fashionable" Apple stores in Paris, Japan, London, etc. He said her presence had more to do with how Apple employees interacted with customers, and a change in Apple employee apparel.

He was absolutely correct with regard to the second: Apple employees now wear either a very sharp-looking grey tunic or a less-fancy blue t-shirt, both much classier than the look they had under Steve Jobs. Tim Cook must have noted that when he took over and hired Ahrendts.

As for the first comment about a change in the way Apple employees interacted with customers I cannot comment on. I've always found them more than just pretty good.

We did mention to Austin that we would probably wait until after the Apple presentation on Monday which Austin said was "smart to do." But he noted, almost in the same breath, that Apple has a 14-day return policy and a 30-day return policy after any announcement of a new update. It was tempting.

But we were tired; it had been a long day. We were tired, wanted to get home, and had we bought last night it would have been a bit longer with the time it would have taken to "pair" the Apple Watch  with May's iPhone. So we made an appointment to return Tuesday, probably after the Apple presentation on Monday. Austin says he will be at the Apple store all afternoon.

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The Apple Page -- Continued

While trying on the Apple Watches last night, I picked one up when the band was off -- just the watch. Except that it was a bit thicker and bit heavier, it "felt" identical to the "old" iPod nano. Austin agreed. In fact, when I blocked on the word I was looking for, he said "nano." One almost gets the feeling the iPhone engineers and the iPod nano designers worked together on the Apple Watch.

I was impressed how "solid" the watch felt. It  had a "heaviness" to it that gave it "gravitas." I was surprised how elegantly the crown worked, both for clicking and scrolling.

May's biggest decision was on the watch band. We were not in the market for 24K Gold or Rose Gold watches, but it was amazing how fast we went from looking at the entry price "sport band" (the band comes "free" with the $349 entry-level watch) to the Milanese loop which would add $149 to the $349 watch.

The Apple presentation, "We Will Loop You In," suggests some changes with regard to the Apple Watch and/or the band, though Austin (and everything at MacRumors) suggests the presentation will be focused on the iPhone and some of the laptops.

I'm hoping this segment in our Apple journey ends Tuesday afternoon.

Saudi Arabia Preparing To Monetize Assets? Top International Story Of The Week? -- March 16, 2016

Updates

March 11, 2018: Shell announces change of plans. After the "separation," Shell had planned to permanently decommission the Convent refinery. Shell has now decided to do a major overhaul of that refinery and keep it running for another five years. 

May 26, 2017: update here. Saudis to spend $18 billion along the Texas coast; Motiva remains its crown jewel in the states.

April 1, 2017: Saudis take 100% control of America's largest oil refinery. The US should now nationalize the refinery. LOL. And, oh, by the way, the "deal" closed under the Trump administration but it was approved and signed under the Obama administration. Saudi Arabia is already America's second-largest source of crude, behind only Canada. The US imported 1.3 million barrels of Saudi crude a day in February, up 32% from last year, according to the Energy Information Administration.

March 8, 2017: pretty much finalized -- split is complete, after a 19-year joint venture. Data points:

• the joint venture was called Motiva
• Royal Dutch Shell and Saudi Arabian Oil (Saudi Aramco) 
• finalized
• Motiva operates three refineries along US Gulf Coast 
• Aramco will pay $2.2 billion to Shell
• Aramco will assume almost all of Motiva's debt of $3.2 billion (includes Shell's share of $1.5 billion)
• Shell will assume only $0.1 billion in net debt
• motive for deal: allows Saudi to expand global refining operations
• Shell needed to reduce debt following acquisition of BG Group for $47 billion  
• Saudi will take full control of the Motiva Enterprises legal identity and the 600,000 bopd Port Arthur refinery in Texas
• Saudi will also take over 24 distribution terminals along with the exclusive license to use the Shell brand for gasoline and diesel sales in Texas and other Southeast and Mid-Atlantic markets
• Shell will gain complete ownership of Louisiana Refining System consisting of 235,000 bopd Norco refinery as well as 230,000 bopd Convent refinery
• Shell will retain 11 distribution terminals along with the Shell branded markets in Florida, Louisiana, and the US Northeast

September 12, 2016: Saudi Aramco bidding for LyondellBasell refinery in Houston Ship Channel; capacity 270,000 bopd; would increase Saudi's crude oil refining capacity by 50% along the Gulf coast. 

March 20, 2016: USA Today -- Saudi now owns largest refinery in the US. 

March 18, 2016: after split, Saudi Aramco wants to buy more US refineries. Reuters is reporting:

Saudi Arabia's national oil company wants to buy more U.S. refining and chemical plants to expand its footprint in the world's largest energy market once the break-up of its joint venture with Royal Dutch Shell Plc is complete.

Ending an often rocky nearly 20-year relationship, Shell and Saudi Aramco announced on Wednesday plans to break up Motiva Enterprises LLC after almost two decades, dividing its assets and leaving Aramco with one plant, the nation's largest crude oil refinery, in Port Arthur, Texas.

Officials from Saudi Refining, the downstream arm of Aramco, told employees following the announcement that the state-owned firm was intent on buying more assets once the Motiva break-up is finished.

This would make sense:

• monetizing this refinery asset, would provide seed money for buying additional refineries
• Saudi looking for refinery access in the US
• it's easier to buy refineries than to build new refineries in the US, although it begs several obvious questions

Original Post

 

This seems like this will be a huge story. It may be bigger than I realize or many realize, for a number of reasons. I will probably list this as a top international story when I compile the top stories for the week.

Motiva Enterprises, LLC, is a huge refinery operation along the US gulf coast, a 50-50 joint venture between Shell Oil Company and Saudi Refining (controlled by Saudi Aramco). The main reason US imports Saudi oil is to supply this enterprise.

According to wiki, this date, Motiva Enterprises consists of:

• three (3) oil refineries in the gulf coast region of the US
• a 600,000 bopd refinery in Port Arthur, TX
• a 235,000 bopd refinery in Convent, LA
• a 240,000 bopd refinery in Norco, LA
• on May 25, 2012, Motiva completed its expansion of the Port Arthur refinery to a capacity of 600,000 bopd; this made it the largest refinery in NA and the fifth largest in the world
• marketing outlets include 7,600 Shell-branded service stateions

It is being announced that Saudi and Shell will "separate" and each will hold 50% of the Motiva Enterprises. At Oil & Gas Journal:

Saudi Refining Inc (SRI) will retain:

• the Motiva name
• 100% ownership of the 600,000 bopd Port Arthur, TX, refinery
• retain 26 distribution terminals
• maintain an exclusive, long-term license to use the Shell brand for gasoline and diesel sales in Texas, the majority of the Mississippi Valley, the US southeast, and the US mid-Atlantic markets

Shell will assume:

• sole ownership of the 235,000 bopd Norco refinery
• sole ownership of the 242,250 bopd Convent refinery (Motiva previously announced this refinery will be integratedto create the Louisiana Refining System (LRS)
• the distribution terminals, as well as Shell-branded markets, in Florida, Louisiana, and the US northeast

Note: the numbers are at slight variance to the wiki source.

To keep this simple: in the break-up, Saudi keeps the Port Arthur, TX, refinery, and Shell gets the two refineries in Louisiana.

Shell owns a co-located petrochemical plant at the Norco refinery.

More at the link.

The reason this seems to be a huge story is this: I don't think anyone ever imagined that Saudi would start monetizing assets. This suggests that a) they are in deeper financial difficulty than "we" realize; and, b) unlike other downturns in the oil industry, Saudi does not see their problems as short term.

Again, Saudi can't live on $60 oil. The US shale industry will be thrown a lifeline at $40; will survive at $50; and may begin to thrive again at $60. For Saudi, $60 oil only slows the hemorrhaging of their cash reserves.

In addition to this, Saudi has announced that its government ministries will cut spending for this year by 5%.

In the past 24 months (I forget exactly when), Saudi canceled/deferred huge solar energy projects because they couldn't handle the cost.

Reason #4,534 Why I Love To Blog -- June 13, 2015

I think one of the most interesting stories to follow for the next two years will be OPEC oil production. Well, duh.

I keep going back to the graph at this post. I keep repeating the same data points, and adding some:

• Saudi embarked on a $35 billion, 5-year program back in 2012 to sustain oil production
• Saudi's oil production has hardly moved since 2012
• Saudi's budget is based on $100 oil
• domestic consumption of oil and natural gas is increasing in Saudi Arabia
• apparently the Saudi quest to find natural gas in Rub al Khali failed; one of many links; a better link;
• Saudi Arabia is embarking on a huge refinery program (see below)
• the water situation in the Mideast is getting more and more challenging, and the amount of energy needed for desalination is beyond one's imagination (see below)
• Saudi has a huge new terrorist organization to worry about
• Saudi is engaged in a fairly expensive shooting war
• President Obama has made it very clear that Saudi is on their own when it comes to security
• the Saudi oil minister is making some bizarre statements about the end of fossil fuel (bizarre or disingenuous)

Saudi Arabia's huge refining program, The Wall Street Journal reported this earlier this year (2015):

Saudi Arabia plans to become the world’s second-largest exporter of refined oil products in 2017 as part of its drive to diversify its economy and increase its share of the global crude and petroleum products markets, the kingdom’s oil minister Ali al-Naimi said Wednesday.

The kingdom’s two new refineries will add 800,000 barrels a day in refining capacity this year. A planned 400,000-barrel-per-day oil refinery in Jazan will bring Saudi Arabia’s refining capacity to more than 3 million barrels a day.

“That will make the kingdom one of the five largest countries in the world in terms of refined crude capacity and the second largest exporter of refined products after the U.S.,” Mr. al-Naimi said.

And even more:

Last year, Saudi Aramco started output at one of the largest oil refineries built in recent years—a 400,000-barrel-a-day project in a joint venture with Total SA. Another 400,000 barrels a day plant in Yanbu, a joint venture with China’s Sinopec called Yasref, started trial runs in September and exported its first shipment in January.

Saudi Aramco has previously said it plans to increase its refining capacity to 8 million barrels a day in the next decade through expansion both at home and abroad.

To some extent, this is a "wash." Countries currently importing Saudi crude oil may switch to importing Saudi petroleum products instead.

Saudi Arabia's domestic energy consumption and desalination: several links --

• desalination, Mideast, 2013, Stanford University study
• Saudi uses 1.5 million bopd for its 30+ desalination plants (this does not provide water for agriculture; agricultural water comes from non-renewable resources)
• desalination, Saudi Arabia, an overview

If Saudi Arabia's oil reserves were inexhaustible, their desalination program would not be an issue. But apparently, Saudi Arabia has concerns.

The kingdom is now embarking on a huge solar-powered desalination project. It will be the world's first large scale solar powered desalination plant.

Just a few weeks ago, on May 22, 2015, The Guardian had a big story on Saudi Arabia turning to solar energy for its desalination program, and then even made the crazy assertion that someday Saudi's solar energy industry would "export" electricity.

This is where the minister of energy sounded a bit bizarre:

“In Saudi Arabia, we recognise that eventually, one of these days, we’re not going to need fossil fuels,” said Naimi at a business and climate conference in Paris on Thursday.

“I don’t know when - 2040, 2050 or thereafter. So we have embarked on a program to develop solar energy,” he said in comments reported by the Guardian, Bloomberg, and the Financial Times. “Hopefully, one of these days, instead of exporting fossil fuels, we will be exporting gigawatts of electric power.”

Naimi also said he did not think that continuing low crude oil prices would make solar power uneconomic: “I believe solar will be even more economic than fossil fuels.”

Be that as it may; it is what it is. It's bizarre but it may be telling.

However, what caught my eye was this, buried deep in the article, why I wrote that this is reason #4,534 why I love to blog:

Saudi Arabia had already said in 2012 it aimed to be powered by 100% renewable energy and later that year announced a $109 billion solar plan. In January, that plan was delayed by eight years. 

Their solar program wasn't just delayed a year or two or three or four, it was delayed eight years. Anyone who has spent any time living and/or working in the Mideast knows that a) it took a lot for Saudi to admit this 8-year delay ("losing face"); and, b) "eight years" was simply a figure pulled out of thin air. It's as likely that it will be an 18-year delay.

Ever since I began following the Bakken, it's been my understanding that Saudi Arabia's budget is based on $100 oil. Most of that budget, based on conjecture and what little I know, was before these huge big projects and challenges came along.

These are big ticket items that will not do well on $50 Saudi oil:

• fighting the war in Yemen
• fighting ISIS
• preparing to fight Iran
• if Saudi decides to go nuclear (and I think they will) that's another huge financial outlay;
• 1.5 million bopd ($100 million/day on the open market worth of oil) to run its desalination programs; that's about $40 billion /year just for potable water (not agricultural water)
• $35 billion, 5-year program to sustain current oil production; it's not so much the dollar cost; it's the fact it takes so much of their only resource (oil) to run the plants
• a $109 billion solar plan (now delayed); there's only one reason to delay, I would imagine: cash flow
• aggressive, expansive refining program
• a Bentley for each Saudi pilot striking Yemen: 100 Bentleys

That was a long note for just a single point, but it provides a starting point for the archives with regard to big-ticket items that Saudi Arabia needs to pay for and why their crude oil production needs to increase to meet their new refinery requirements. One almost gets the feeling that if Saudi increases their production from 10.3 million bopd to 11.3 million bopd they are simply running faster to stay in the same place.

By the way, solar is not all it's cracked up to be (a future post on this will be forthcoming; I can hardly wait).