Japan’s Sumitomo Chemical plans to expand on its $9.8 billion refinery and petrochemical project in Rabigh, Saudi Arabia, to include downstream petro-chemical plants such as plastics processing, a top official said.

He said Sumitomo was now considering the second phase of the project together with joint venture partner Saudi Aramco.
Sumitomo and Saudi Aramco broke ground on the PetroRabigh project in March this year.
The project consists of upgrading Aramco’s existing 400,000 barrels per day (bpd) refinery at Rabigh to enable it to produce better-quality products and integrating the site with a petrochemical complex.
The project is scheduled for completion in October 2008.
When completed, the refinery would have a new 2.8 million tonnes per year (tpy) (66,000 bpd) fluid catalytic cracker finery and an ethane cracker with an ethylene capacity of 1.3 million tpy.
Other new petrochemical plants would comprise a 350,000 tpy liner low density polyethylene plant, a 300,000 tpy high density polyethylene plant and a 600,000 tpy ethylene glycol plant.
He said Sumitomo was confident of being able to complete the project on time, as the partners started ordering various plant equipment one and half year ago.
He estimated that the project would create up to 30,000 jobs in Saudi Arabia but said the kingdom would not be able to achieve significant long-term employment growth without developing its manufacturing sectors downstream, such as the automotive and electrical appliance sectors.
In August, 2005, Saudi Aramco and Sumitomo Chemical signed an agreement to form Petro-Rabigh as a joint venture, following the successful completion of a joint feasibility study, during which both companies performed front-end engineering design and verified the viability of the project.
The joint feasibility study began on May 9, 2004, when Saudi Aramco and Sumitomo Chemical signed a memorandum of understanding to launch the effort. Subsequently, the joint venture was formed in September 2005.
Concurrent with the feasibility work and early engineering activities, long-lead equipment and materials were identified and procurement efforts begun. At the same time, the major engineering, procurement and construction (EPC) contracts have been signed and awarded. Work on all the EPC contracts has started, including the construction work on site for the major units.
PetroRabigh signed financing agreements with Japan Bank for Interna-tional Cooperation (JBIC), Public Investment Fund of Saudi Arabia (PIF) and 17 financial institutions in respect of facilities totalling $5.8 billion. The facilities have been raised for the Rabigh Refinery and Petrochemical Project to be developed.
The project has also created third-party investment opportunities in Saudi Arabia’s private sector for utilities and other related infrastructure.
It presents an opportunity for increased industrialisation in Saudi Arabia and a platform for more diversified downstream conversion industry development in the Kingdom.