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Mon 23 Feb 2009 12:00 PM

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PetroRabigh to go on stream in March

Project will produce 17.2m tpa of high-value petroleum products and 2.4m tpa of petrochemicals.

Saudi’s Rabigh for Refining and Petrochemical Company (PetroRabigh) expects to start up its mega petrochemical project – one of the biggest projects in the Middle East – by the end of March, whatever the economic conditions according to official sources from the company.

The company commences commercial operations at its new 600,000 tpa monoethylene glycol (MEG) line at as planned end of February 2009, and will begin shipping it out of plant located at the Red Sea coast of Saudi Arabia in end-March, says a media report.

The project was expected to come on stream by the end of 2008, but the raise of project’s cost by US$300m around 3% of the total $ 10bn cost due to some technical issues, postponed the start up of operations to the first quarter 2009.

Aramco and Sumitomo have re-issued tenders for the project due to prices of raw materials such as steel and cement falling sharply in the last four to five months as a result of the global economic crisis, and the joint venture partners want to "review the expansion plan to reduce costs."

Companies interested in pre-qualifying were asked to submit their interest by January 9. The contracts in question cover the front end engineering and design and project management of the expansion and were originally due to have been awarded in June 2008.

The bidding was later extended to October and was ultimately scrapped because only two contractors bid – Italy's Tecnimont and Japan's JGC Corp.

The facility is being constructed at the site of Saudi Aramco’s existing Rabigh Refinery, which produces 19% of the Kingdom’s current refining capacity. Commissioned in 1989, the refinery has a crude refining capacity of 400,000 barrels per day.

Saudi Aramco handed over Rabigh refinery to PetroRabigh to operate last October 2008.

The PetroRabigh project will initially produce 18.4 million tonnes per annum (tpa) of petroleum-based products and 2.4 tpa of ethylene and propylene-based derivatives.

PetroRabigh is owned by Saudi Aramco 37.5%, Sumitomo Chemicals 37.5% with the balance being held by private investors and institutions.

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