Saudi Aramco, Sumitomo petrochem complex to cost more than previous estimates

15-May-14

The expansion of a petrochemicals complex in Saudi Arabia owned by Saudi Aramco and Sumitomo Chemical is now expected to cost 32 billion riyals (US$8.5 bln), higher than previously estimated, the joint-venture said, as per Reuters. The expansion plan, which aims to increase output from the plant as well as introduce higher-margin products, was originally estimated to cost around US$7 bln. The statement did not give any reason for the change in price, but said the project - situated on Saudi Arabia's Red Sea coast - was still due to come online during 2016. The joint-venture, known as PetroRabigh, has had a number of setbacks because of maintenance issues in 2013 at its existing facility including power cuts and an outage at its ethane cracker. A new marketing deal with its parent firms in December has helped alleviate the pressure on profits from the maintenance problems. Both Aramco and Sumitomo have also made firm commitments to the expansion project, known as Rabigh II, since giving it the final go-ahead in 2012. Under the plan, an existing ethane cracker will be expanded and a new aromatics complex built that will make higher-value petrochemical products and have a capacity of 1.72 mln tpa.