Saudi Aramco May Halt Ras Tanura Clean Fuels Project

State-owned Saudi Arabian oil giant Saudi Aramco has suspended plans to build a $2 billion clean fuels plant at its largest oil refinery in Ras Tanura, industry sources told the news agency Reuters.

The energy project appears to be one of the first suspended in Saudi Arabia in response to the halving of the oil price in the last six months, the news agency said.

The Ras Tanura clean fuels project, including a naphtha hydrotreater, was to be part of a second phase of upgrades to Aramco's refineries, and was originally due to go on stream in 2016.

Reuters pointed to conflicting reports, with one source saying that bidding on the project had been withdrawn, while another speculated that the postponement was only for a year. A third source aid Aramco was evaluating its projects following the fall in oil prices to determine which should have priority.

In November, Aramco CEO Khalid al-Falih was quoted as saying that the cyclical moves of oil markets would not throw the company's long-term corporate strategy off track.

Aramco invited bids in 2013 for the Ras Tanura project but later decided to hold another round as proposals were higher than its budget. The company also canceled one of the packages for paraxylene production after finding it was not economically feasible.