Saudi Arabia has launched ambitious projects to develop its oil and gas sector and reinforce its position as a top producer and exporter.

Saudi Aramco moved forward on two new mega projects as it signed landmark contracts with some of the world's leading engineering and construction firms for the Khursaniyah Oil and Gas Program and the Hawiyah Natural Gas Liquids (NGL) Recovery Program.
Saudi Aramco president and chief executive officer Abdallah S Jum'ah congratulated the winning firms and the project teams, and emphasised that these contracts will help Saudi Aramco deliver on its promise to continue securing energy for the nation and for the world.
"The oil facilities will reinforce the company's international role in responding reliably to future oil market demand, while the gas programme demonstrates Saudi Aramco's commitment to continue playing its part in the Kingdom's efforts to further grow and diversify the economy," Jum'ah said.
The Khursaniyah Program will develop oil and gas production facilities for the onshore Abu Hadriya, Fadhili and Khursaniyah oilfields near Jubail Industrial City in the Eastern Province, with capacity reaching 500,000 barrels of crude oil daily by the end of 2007.
The Hawiyah NGL Recovery Program will produce an additional 310,000 barrels of ethane and NGL products daily through the Hawiyah NGL Plant near the Ghawar Field and an expansion of the Ju'aymah Gas Fractionation Plant not far from Ras Tanura, expected to be completed in early 2008.
Italy's Snamprogetti was selected for the execution of the Khursaniyah Producing Facilities.
The scope of work includes building a central gas-oil separation plant (GOSP) and wet crude handling facilities to process crude from the three fields, gas gathering compression facilities, a cogeneration plant, crude stabilisation and water injection.
A consortium of Bechtel Overseas of London and Technip of Rome was selected for the Khursaniyah Gas Plant. The scope of work covers construction of two trains of gas conditioning and ethane and NGL recovery with a total capacity of 1.0 billion standard cubic feet per day (scfpd). The facilities will produce 550 million scfpd of sales gas and 240,000 bpd of ethane and NGL and 1,800 tonnes of sulphur.
Saudi Aramco also awarded five contracts to build the world's largest NGL processing plant at Hawiyah to recover ethane and NGL from approximately four billion scfpd of sales gas.
Japan's JGC Corp was awarded the contract for the Hawiyah NGL and related facilities, consisting of three (3) NGL recovery trains, product surge and shipping facilities, utilities, tank and process control system.
Snamprogetti will carry out the work related to gas treating and compression facilities to include inlet distribution, two gas treating trains, sales gas compression, and electrical system and support facilities.
Contracts for communication, plant infrastructure facilities and temporary camp and catering services were signed with local contractors: General Telecom & Engineering (GTE), Modern Arab Construction (MAC) and National Engineering Services and Marketing Agency (NESMA).
Under a separate contract, Spain's Tecnicas Reunidas will expand the Ju'aymah Gas Fractionation Plant as part of the Hawiyah NGL Recovery Program. The contract calls for construction of a fourth train to fractionate 270,000 bpd of ethane and NGL and 100,000 bpd of propane and NGL.
These contracts have placed particular emphasis on maximising Saudi participation in the engineering and construction phases of the programme. Saudi employment requirements have been included as part of the project requirements, in addition to using Kingdom-based engineering firms in the design phase.
Saudi Aramco has been honing its relationships with engineering and construction firms around the world, and the contracts reflect the growing sophistication of those partnerships. Over the years, Saudi Aramco has demonstrated an unwavering commitment to establishing meaningful relationships with international contractors, manufacturers and suppliers.
"The stage is now set for a new and lucrative business relationship between Saudi Aramco and contractors," said Saad F Al-Dosari, Saudi Aramco's acting Executive Director of Project Management.
Saudi Arabia might manage to add 200 billion barrels of crude reserves to its existing 261 billion barrels, which make up a quarter of the world's total, Oil Minister Ali Al Naimi said.
"There is a possibility that the kingdom will increase its reserves by around 200 billion barrels, either through new finds or by increasing what it produces from existing fields," Naimi said.
That would be in addition to some 261 billion barrels of reserves that are the world's largest, he said.
"These huge reserves enable the kingdom to remain a major oil producer for between 70 and 100 years, even if it raises its production capacity to 15 million barrels per day (bpd), which may well happen during the next 15 years," Naimi said.
Saudi Arabia is forging ahead with plans to lift oil production capacity to maintain a spare cushion of supply capability, Naimi said.
The world's biggest producer is implementing plans to lift capacity to 11.8 million barrels per day (bpd) in 2007 from 11 million bpd now, Naimi said.
Saudi Arabia is also looking to nearly double the number of extra tankers it hires, signaling rising oil output from the world's top exporter, a Gulf shipping source said.
The kingdom is raising output to fatten oil stocks to cushion against a surge in demand later this year.
Asian refiners were told Saudi Arabia will supply 100 per cent of contracted volumes in May, up from 90 per cent in April. Volumes to the Europe and the US were flat, refiners said.
Asia takes about 60 per cent of Saudi Arabia's exports.
Saudi Arabia's chartering arm, Vela International Marine, usually charters an extra seven tankers a month. The shipping source said in addition, Vela has inquired about chartering six more very large crude carriers, each capable of carrying as much as two million barrels of oil, for the US Gulf.
That could reflect as much as 500,000 barrels per day of increased Saudi oil production, the source said.
Vela has already provisionally booked five tankers bound for US customers in early May, another shipping source said.
Saudi Arabia also intends to boost oil output towards 10 million barrels per day (bpd) in May to help build stocks before an expected end-year demand surge, industry sources say.
"We think the Saudis will be pumping an extra 500,000 bpd or more in May," said a senior Western oil executive.
May could mark the first time since 1980 that the kingdom, the world's biggest oil exporter, has sustained crude production near 10 million, according to industry analysts.
"We're getting a lot more oil in May," said a source at a major Saudi customer. "They certainly seem to be pumping as much as they can."
He, and other customers, said they had not requested extra Saudi barrels but that Aramco had restored contract volume reduced under previous Opec cutbacks.
Saudi Arabia, and its fellow Gulf Opec members, want to hoist volume to let global consumers build inventories and avoid a potential supply crunch and price spike in the fourth quarter.
With Saudi Aramco exporting about three million bpd of crude oil to refiners in Japan, South Korea, China and India, a 10 percentage point increase in supplies should add at least 300,000 bpd of fresh oil, industry sources say.
That total should rise taking into account smaller regional customers and a 10-per cent-plus rise to oil majors, who lift about 2.0 million bpd on their own, traders said.
Investment for a planned 400,000 barrel-per-day export refinery in Saudi Arabia's Red Sea city of Yanbu will run to $4-$5 billion, a senior Saudi Aramco official said.
Khalid Al-Buainain, Vice President of refining, said the proposed refinery will run on a diet of heavier quality crude, and that its products will definitely meet European and US specifications.
Yanbu is strategically located and the new refinery could supply the US East Coast with gasoline, low-sulphur diesel to Europe and naphtha to East Asia, Buainain said.
He said Aramco was also considering revamping its Ras Tanura refinery at a cost of around $4-$5 billion and adding a petrochemical complex.
Naimi said that the kingdom expects to see more downstream joint ventures with Asian partners in the next few years. 
Naimi also said Saudi Arabia takes 'very seriously' its role as central banker of oil, adding that Saudi Arabia will continue to work to keep prices at reasonable levels.
Saudi Aramco also plans to double the number of drilling rigs it operates in order to develop new petroleum fields.
"Saudi Aramco's target is to have 70-plus drilling rigs working by the end of 2005," said a Saudi Aramco official. Opec data put the number of Saudi rigs at 34 in December 2004.
Petrochemicals giant Saudi Basic Industries Corp (Sabic) said it plans a one-for-three bonus share issue and will distribute a 15 riyal ($4) per share dividend.
Sabic's net profit rose 113 per cent last year to a record 14.25 billion riyals on the back of high global prices for its products.
Saudi Arabian Fertilizer Company (Safco), an affiliate of Sabic, is constructing what is claimed to be the world's biggest ammonia and urea plant complexes in Jubail with an annual production capacity of 1.1 million tonnes.
Sabic will also cut 200 jobs at its German manufacturing site at Gelsenkirchen, the Middle East's top petrochemicals maker said.
Sabic said 150 of the 540 jobs at the site, in western Germany, would be cut in the next two years, and a further 50 in 2008 when Sabic will replace an existing plant with a new and bigger one.
Sabic will also increase production at the site, investing 30 million euros ($39 million) in plant and infrastructure.
Meanwhile, the National Shipping Company of Saudi Arabia (NSCSA) has bought a 30.3 per cent share in LPG shipper Petredec for $50 million, the two firms said.
NSCSA chairman Abdullah Nojaidi said it was investing in the Bermuda-based firm in a bid to become a market leader in LPG trade out of the Gulf.
Saudi Aramco and Sumitomo Chemical Co have selected Basell's Hostalen technology for a new 300,000 tonnes per year (tpy) high density polyethylene plant, Basell announced. The plant will be part of a new integrated refining and petrochemical complex to be built in Rabigh with the start-up planned for late 2008.
Meanwhile, Abdullah Al-Saif, Senior Vice President of Saudi Aramco for Exploration and Production, emphasised to the Company's employees their vital role in the global economy and said he was confident of their continued successes. Al-Saif praised the company workforce for its commitment to quality and efficiency.
"Last year was one of the best years, if not the best year, Saudi Aramco has had in all aspects: revenue, safety and everything else," Al-Saif said. "It would not have been as successful without the staff."