US-Saudi consortium narrows sites for $5B refinery bypassing Strait of Hormuz

A consortium of American and Saudi companies announced Wednesday it has entered the final stage of site selection for a $5 billion integrated oil refinery and export corridor designed to bypass the Strait of Hormuz, as the ongoing Iran war continues to disrupt global energy flows.

The Project

The MERA Oil consortium — comprising Texas-based MWG Enterprises, the Patel Family Office, and PWS, a unit of Saudi Arabia's AHQ Group — has shortlisted three sites within the Gulf Cooperation Council bloc for the 200,000-barrel-per-day facility, according to a statement reported by Reuters. The consortium did not disclose the specific locations under consideration but said a preferred host would be confirmed by the end of 2026.reuters

The refinery will be linked to deepwater port infrastructure, large-scale storage for crude and refined products, and marine export facilities with direct access to international shipping routes, the companies said. If the project proceeds, mechanical completion of phase one is targeted for the end of 2029, followed by commissioning and commercial operations.thenationalnews+1

"Three years of evaluation across the region and two years of detailed engagement with three outstanding locations have brought us to a clear decision point," said Marc Gunderson, founder of MWG Enterprises.thenationalnews

Funding for the first phase will be raised through sponsor equity, sovereign and institutional participation, international project finance, export-credit support, and Shariah-compliant financing structures. A final investment decision has not yet been made, with site due diligence and engineering design still pending.thenationalnews

Jazan Shutdown Adds Urgency

The announcement comes two days after Saudi Aramco was forced to shut its 400,000-barrel-per-day Jazan refinery following a Houthi missile and drone attack on July 27 that damaged the facility's integrated gasification combined-cycle complex and an oil storage area. Aramco expects to complete repairs and restart operations by August 15.middleeasteye+1

The Jazan shutdown removed a large volume of refining capacity from an already strained global market. Houthi military spokesperson Yahya Saree said the group had struck Aramco facilities in both Jazan and Yanbu.aljazeera+1

Strategic Context

The MERA Oil project is part of a broader push by Gulf producers to develop export routes that avoid the Strait of Hormuz, which has been effectively disrupted since early 2026. Other bypass efforts include pipeline expansions to ports on the Gulf of Oman and the Red Sea coast. The consortium said its energy complex would incorporate advanced emissions-control systems, with sustainable aviation fuel co-processing and carbon-management capabilities under evaluation as potential future components.linkedin+4