Saudi Aramco and Sumitomo Chemicals are in talks to expand their US$10 billion joint venture Rabigh Refining and Petrochemical Co. (PetroRabigh), in a bid to add new product lines to the complex. PetroRabigh is estimated to start commercial operations in Q4-08, and is planning an IPO next year to sell a 25% stake open only to Saudi nationals. An early share sale would raise cash and help offset rising project costs. Soaring material and construction prices have more than doubled the project cost from an initial estimate of US$4.3 bln.
Sumitomo and state-owned Aramco, the world's largest oil company by output, agreed in 2005 to develop the petrochemical complex through a 50-50 joint venture that would upgrade a refinery at Rabigh on the Red Sea coast. The new complex will annually produce 18.4 mln tons of oil products, 1.3 mln tons of ethylene and 900,000 tons of propylene.