Work on Saudi Rabigh refinery, petchem project to start by April

Vienna (Platts)--8Mar2006

Saudi Aramco and its joint venture partner Sumitomo Chemical plan to
start work on their 50:50 joint venture refinery and petrochemical complex at
Rabigh, Saudi Arabia by April, Saudi oil minister Ali Naimi said Wednesday.

Last week, the two companies signed financing deals to secure $5.8-billion to
fund part of the work on the project, which has a total price tag of around
$9.8-billion. The project entails building a new petrochemical complex that
would center around a steam cracker with an ethylene capacity of 1.3-million
mt/year, among the largest in the world. The complex would be integrated with
Aramco's existing 400,000 b/d refinery at Rabigh, which si to be upgraded.

     The cost of the project has almost doubled since initial plans were drawn
up. Naimi told reporters that 70% of this increase was due to inflation. The
Rabigh complex is one of several projects being undertaken by Aramco as it
aims to increase its refining capacity in Saudi Arabia and overseas by 50% in
the coming years. The company also plans to build two new joint venture
refineries at Jubail and Yanbu, each with a capacity of 400,000 b/d. Naimi
said France's Total was now the preferred partner for the Jubail project after
having submitted the best technical bid. ConocoPhillips is the preferred
partner for Yanbu, the minister said.

     In the upstream sector, Naimi said Saudi Arabia's most recent oil field
expansion, the Haradh project, was on track to reach plateau output of 300,000
b/d on April 1. The Haradh project would increase Saudi Arabia's crude oil
production capacity, already the world's highest, to 11.3-mil b/d.

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