A major new joint-venture refinery in Saudi Arabia on Thursday shipped its first clean diesel cargo, the company Yanbu Aramco Sinopec Refining Co (Yasref) said.

The start-up of the refinery is expected to weigh on diesel prices as the rise in supply will far outweigh demand, which has been sluggish because of weak economic growth, traders said.

The 400,000 barrels-per-day (bpd) refinery, a joint venture between Saudi Aramco and China's Sinopec, started trial runs in September and had originally planned its first exports by November.

Yasref said in a statement it loaded 300,000 barrels of diesel from the refinery, located in Yanbu on the Red Sea coast.

Yasref is the second refinery to start up in Saudi Arabia in the past two years and will complete state company Saudi Aramco's transformation into a leading exporter of diesel.

The company did not specify where the shipment headed to but one trader said that it was likely being sold into Egypt.

The cargo was being sold as a 500 ppm sulphur gasoil grade, although it most likely had a lower sulphur specification of 75 ppm, two traders said.

Once production is stable and secondary units are running, the refinery will likely export the 10 ppm sulphur diesel grade, which is compatible with European standards, traders said.

Yasref will produce 263,000 bpd of diesel, 90,000 bpd of gasoline, 6,200 tonnes per day of petroleum coke, 1,200 tonnes a day of pelletized sulphur and 140,000 tonnes a year of benzene, according to the company website.

The first cargo will be marketed by Saudi Aramco, which holds 62.5 per cent share of output from the mega refinery, an industry source said.

Sinopec, which holds the remaining share, will target Europe and East Africa for diesel shipments from the refinery. – Reuters