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FinanceU.S.-Saudi Consortium Plans $5B Gulf Refinery Outside Hormuz
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A consortium of U.S. and Saudi companies, named MERA Oil, plans to build a $5 billion refinery in the Persian Gulf with a capacity of 200,000 barrels per day. The project, which includes Texas-based MWG Group, the Patel Family Office, and PWS (linked to Saudi AHQ Group), will also feature a deepwater port, storage, and export facilities. The site will be selected from three Gulf Cooperation Council locations, all outside the Strait of Hormuz. Future additions may include sustainable aviation fuel and carbon management. The announcement comes as Saudi Aramco's Jazan refinery was shut down after a Houthi attack, removing 400,000 bpd from global refining capacity. Repairs are expected to take until mid-August, worsening refined fuel supply shortages. Meanwhile, Russia has begun restarting refineries hit by Ukrainian drone strikes but maintains a diesel export ban.
Source report
A consortium of U.S. and Saudi companies is moving forward with plans to build a new refinery in the Persian Gulf, despite ongoing instability in the region. According to Reuters, the facility will cost $5 billion and have a capacity of 200,000 barrels of crude oil per day.
Consortium and Site Selection
The consortium, named MERA Oil, includes:
- MWG Group (Texas-based)
- Patel Family Office
- PWS, a company associated with Saudi AHQ Group
The partners are currently selecting a site for the new facility, with a shortlist of three possible locations within the Gulf Cooperation Council (GCC), which comprises six Gulf states.
Project Scope
In addition to the refinery, the project will feature:
- A deepwater port
- Storage capacity
- Export facilities
The consortium confirmed that the location will be situated outside the Strait of Hormuz.
Future Expansion Plans
Reuters also reported that the complex may later add:
- Sustainable aviation fuel processing capacity
- Carbon management facilities
Regional Context: Jazan Refinery Shutdown
Earlier this week, Saudi Aramco was forced to shut down its Jazan refinery, removing 400,000 barrels per day from global refining capacity, following a strike by Yemeni Houthi forces. The attack occurred on Saturday, and video verified by Reuters showed a large plume of smoke rising from the refinery.
Houthi military spokesman Yahya Saree stated that the group also struck Aramco facilities in Yanbu. Saudi Aramco has not commented on the damage or a restart schedule. According to media reports, repairs at Jazan are expected to take until mid-August.
Impact on Global Fuel Supply
The shutdown is expected to worsen an already severe supply situation for refined fuels. Analysts have warned about this for months, but the impact has only recently become acute, as crack spreads soared to an all-time high. This is driven by the gap between fuel demand and supply amid ongoing conflicts in the Persian Gulf, the Red Sea, and Russia.
Mixed Developments
- Positive: Russia has begun restarting refineries damaged by Ukrainian drone strikes.
- Negative: Russia’s ban on diesel exports remains in place.
By Irina Slav for Oilprice.com
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U.S.-Saudi Consortium Plans $5 Billion Gulf Refinery Outside Hormuz Amid Regional Tensions