Aramco, Total to invest $1bn to develop retail fuel service stations in Saudi

State oil giant Saudi Aramco and France’s Total have formed a joint venture to invest around $1bn to develop a network of retail fuel service stations in Saudi Arabia.

The 50:50 JV will invest the amount over the next six years in the Saudi retail fuel market to provide motorists with premium fuels and retail services, they announced on Thursday.

The new venture will take a “phased approach” to expanding its network of domestic fuel retail stations, with a plan to reach the goal of owning and operating hundreds of stations by 2021, a statement said.

The JV will be governed by a board of directors comprised of six members with Mohammed Al-Gahtani serving as the CEO.

Plans for the JV were first revealed last year.

Read more: Saudi Aramco, Total sign deals for $9bn petrochem complex, fuel station venture

The two companies have also signed an agreement with the owners of Tas’helat Marketing Company (TMC) and Sahel Transport Company (STC) to acquire them, jointly acquiring their existing network of 270 service stations and their fuel tanker fleet.

Saudi Aramco and Total said they plan to “modernise” this network and build high-quality service stations at selected locations.

The transaction is subject to approval of regulatory authorities.

Abdulaziz Al-Judaimi, Saudi Aramco’s SVP of Downstream and chairman of the JV board: “With this new business, we aim to enhance the quality of services, as well as create jobs and additional investment opportunities in the kingdom.

“This project is designed to also help optimise the total value of our hydrocarbon resources.”

Momar Nguer, president of Marketing and Services and Executive Committee member at Total, said: “Total is proud to be the first international major oil company to invest in Saudi Arabia’s fuel retail network. This joint agreement is in line with our strategy to expand in fast-growing markets worldwide.”

The Saudi government aims for 1,200 fuel stations to be built across the kingdom in the coming years.

Last year, Dubai’s ENOC and Abu Dhabi’s ADNOC announced plans to open fuel stations in the kingdom.

Read: Dubai’s ENOC to open 45 Saudi fuel stations