Dow and Saudi Aramco to relocate JV to Al Jubail, call off refinery expansion in Ras Tanura

25-May-10

Rising costs have prompted Dow Chemical and Saudi Aramco to relocate their planned joint venture (JV) petrochemical project from Ras Tanura to Al-Jubail. Existing infrastructure at Al Jubail adjacent to a refinery under construction by Saudi Aramco Total Refining and Petrochemical (Satorp), will help control the escalating costs of construction. The JV is being scaled down to include one cracker, rather than two. Since the original Ras Tanura project was to be integrated with Aramco's existing Ras Tanura refinery, the relocation has also resulted in cancellation of the refinery expansion. The Satorp project, known as the Jubail Export Refinery, which will have a processing capacity of 400,000 bpd and will also produce paraxylene (PX), benzene and polymer grade propylene (PGP). As per original estimates, the proposed Ras Tanura project was to cost about US$20 bln, but these costs have escalated as projects have become more expensive. The project is likely to start up in 2014 or 2015. With the move to Al-Jubail and change in scope, the timing is expected to slip by several months.