Construction commences on Saudi Aramco and Sumitomo JV

20-Mar-06

Construction commenced on the largest integrated refining and petrochemical complex in Saudi Arabia in the town of Rabigh. The US$9.8 billion Rabigh Refining and Petrochemical Company's (PETRORabigh) project is expected to be completed by the end of 2008. The project includes, a high yield olefins fluid catalytic cracker complex integrated with a world scale, ethane based cracker. The crackers will produce approximately 1.3 million tpa of ethylene and 900,000 tpa of propylene along with 60,000 bpd of gasoline in addition to other refined products. Downstream petrochemical units will be included to convert all of the olefin production to downstream products. The size of the project led the JV to involve several local and international financial institutions in funding the complex. The two companies raised a total of $5.8 billion from the Islamic Development Bank (IDB), Japan Bank of International Cooperation, the Saudi Public Investment Fund and 17 other financial institutions including French Calyon Bank, SABB, HSBC, Citibank N.A., Riyad Bank and BNP Paribas and the Bank of Tokyo-Mitsubishi UFJ Ltd. 25% of the project's capital would be floated for public subscription, resulting from direct orders from Custodian of the Two Holy Mosques King Abdullah. Saudi Aramco currently owns and operates a topping refinery at Rabigh with a nominal crude distillation capacity of 400,000 barrels per day. Studies concluded that the best alternative to capture the synergies of the existing large crude capacity, together with significant investment in site and infrastructure, would be to expand the site into a large, fully integrated refinery and petrochemical complex.