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Saudi, France to sign billions in ship, plane deals – France to study building nuclear reactors in kingdom

Saudi Arabia’s Defense Minister Prince Mohammed Bin Salman (fourth from right) and a Saudi delegation meet with French foreign minister Laurent Fabius (fourth from left) at the Quai d’Orsay in Paris

Saudi Arabia’s Defense Minister Prince Mohammed Bin Salman (fourth from right) and a Saudi delegation meet with French foreign minister Laurent Fabius (fourth from left) at the Quai d’Orsay in Paris

PARIS: Saudi and French officials are finalizing negotiations on contracts for patrol ships, border guard helicopters, planes and two possible nuclear reactors worth more than $12 billion. The announcement comes during a high-level Saudi visit to France yesterday, as Saudi Arabia is leading a military campaign against extremists in neighboring Yemen. French Foreign Minister Laurent Fabius said Wednesday that the two have agreed to sell French patrol boats “to enhance the capability of the Saudi Coast Guard, which is today facing growing threats.” A French government statement says the two countries are finalizing contracts for 23 helicopters for the Saudi Interior Ministry, 50 Airbus jets, and a study for two new-generation nuclear reactors, and nuclear waste and nuclear safety training.

France said it would look into building two nuclear reactors in Saudi Arabia, which is part of some $12 billion (10.7 billion euros) in deals announced yesterday with the conservative kingdom. Under one of the agreements Airbus will sell 23 h- 145 multipurpose helicopters to Saudi Arabia for 500 million euros ($560 million) as well as launch a feasibility study into building the reactors, French Foreign Minister Laurent Fabius said.A slew of deals worth billions of euros were announced following the first “Franco-Saudi Joint Commission” meeting in Paris, led by Fabius and Saudi Defence Minister Prince Mohamed bin Salman. Fabius also mentioned the Saudi Arabian Airlines order for 50 Airbus passenger planes worth some $8 billion, first announced at last week’s Paris Air Show.

The reactor study takes on added significance given the current efforts by Saudi Arabia’s rival, Iran, to develop its own nuclear capabilities. France has been reinforcing links with the conservative kingdom despite persistent criticism of its human rights record, while Riyadh is keen to broaden its ties with Western powers beyond its traditional alliance with the United States. Salman was set to meet French President Francois Hollande later. Saudi Arabia has been under international pressure, including from Washington and Paris, to drop a sentence of 1,000 lashes for a renowned human rights activist and blogger. The kingdom has also faced criticism over its use of the death penalty.

According to an AFP count, Saudi Arabia executed 102 locals and foreigners in the year to mid-June, compared with 87 during all of 2014.

Capacity milestone
Yanbu Aramco Sinopec Refining Co (Yasref ), a joint venture between Saudi Aramco and China Petrochemical Corporation (Sinopec), said yesterday its new refinery had achieved a milestone processing crude at full capacity of 400,000 barrels per day (bpd). The second full-conversion refinery in Saudi Arabia makes gasoline, high quality diesel and liquefied petroleum gas (LPG) as well as byproduct sulfur and petroleum coke for export. It processes Arabian heavy crude. “On June 22nd, Yasref reached full capacity of processing 400,000 bpd of Arabian Heavy crude in a full conversion refinery in what we believe is a record time,” Mohammad Al- Shammari, Yasref’s CEO, told Reuters in a telephone interview. “All processing units are up and running,” he said. Yasref is 62.5 percent owned by Saudi Aramco while Sinopecholds the rest. Alshammari said one of the company’s objectives is listing shares in the Saudi stock market but the timing has yet to be set.

The refinery began commercial operations on April 1 and in mid-May hit full capacity processing Arabian light crude before switching to Arabian heavy crude and reaching full capacity on June 22, Alshammari said. By the end of May, the refinery had exported 20 million barrels of diesel and gasoline and more than 150,000 tonnes of petroleum coke. It has also supplied the domestic market with refined products, he said, and is producing close to the designed capacity target of 90,000 bpd of gasoline and 260,000 bpd of diesel. Saudi Arabia is investing heavily in upgrading and building new refineries to maximise value from exporting only crude oil. It has traditionally been the world’s biggest exporter of crude and the kingdom’s rapid transition into one of the largest oil refiners adds an extra dimension to global oil markets. The growth puts Saudi Aramco’s owned or equity stakes in refining at 5.4 million bpd, at least 40 percent above a decade ago. Aramco itself markets more than 3 million bpd of that, tying it with Shell as the world’s fourth-largest oil refiner.— Agencies

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This article was published on 24/06/2015