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Chart 59: Saudi government refining assets (effective stake in k bpd) Chart 60: Saudi refining breakdown per region (effective stake) 1,006 23% 2,464 56% 914 21% m Domestic fully owned sm Share in domestic JVs m Domestic fully owned m Share in domestic JVs m Share in JVs overseas @ Share in JVs overseas Source: Saudi Aramco, BofA Merrill Lynch Global Research Source: Saudi Aramco, BofA Merrill Lynch Global Research Exports are geared towards Asia and Far East Saudi Arabia exported c.1mbpd of oil products in 2014, mainly to Asia and the Far East (56%), other Middle Eastern countries (19%) and Western Europe (12%). Chart 61: Oil product export volumes split per region in 2014 Chart 62: Saudi Arabia oil product slate in 2014 1% 1% 20.1 13.0 449 11% 56% 203.4 12% 43.7 m@North America South America Western Europe mLPG = Naphtha m Gasoline m Jet Fuel m Middle East m Middle Africa Asia and Far East Diesel Fuel oil _m Asphalt Source: Ministry of Energy, Industry and Mineral Resources. Source: Company data, BofA Merrill Lynch Global Research Ambitious natural gas expansion The NTP also focuses on expanding natural gas production. The government aims to grow the existing production by 48%, largely through non-traditional routes. According to the minister of Energy, Industry and Mineral Resources, natural gas accounts for 50% of energy production and the target is to increase this to 70% by 2020 through expanding local production or importing if necessary. The government’s priority will be to explore the option of local production, although imports were, for the first time, not excluded. We consider this as an interesting development as importing LNG into Saudi costs the same as producing it internally through non-traditional routes, in our view. The Saudi statement acknowledges that Saudi Arabia is willing to be open to the possibility should imports provide a more economic means for this purpose. Table 28: National Transformation Plan objectives in the petrochemicals, oil, and refining sectors Base line Target 2020 Regional benchmark Global benchmark Oil production capacity (mn bbls/day) 12.5 12.5 3.8 Ai Dry gas production capacity (bn scf per day) 12 17.8 57 16 Refining capacity 29 3.3 td 1.9 memo: Initiative cost to the government (total SAR491mn or US$134mn): Energy SAR216mn Oil & Gas SAR200mn Gas network SAR75mn Source: Saudi National Transformation Plan 72 GEMs Paper #26 | 30 June 2016 38 Merrill Lynch HOUSE_OVERSIGHT_016182