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Tue 24 Apr 2007 10:55 PM

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Saudi to raise refining capacity by 62%

The Kingdom's refining capacity will reach 3.4 million barrels per day by 2012.

Saudi Arabia's refining capacity will reach 3.4 million barrels per day (bpd) by the start of 2012, up 61.9% from its level in 2006, the country's investment authority said on Tuesday.

The increase will be achieved once three planned refineries start production, the Saudi Arabian General Investment Authority (SAGIA) said in a report sent to Reuters.

"The [new] capacity will represent 17% of the global rise in capacity and will be worth investments of more than $20 billion," SAGIA said.

Saudi Aramco has signed two joint ventures with France's Total and US ConocoPhillips for export refineries with a capacity of 400,000 bpd each to cope with a growing crude output capacity.

Total's refinery in Jubail will cost $6.4 billion and the Yanbu refinery with ConocoPhillips will cost $6 billion.

The deals are part of plans by Aramco to spend with partners $50 billion by end-2011 to boost refining capacity at home and abroad.

Aramco has yet to find a partner for the third refinery, which will be located in the western Jazan province. Chevron said in February it was not interested in the projected 400,000 bpd refinery because it was far from the oil-producing eastern province.

Expansion projects in the petrochemical industry will nearly double the kingdom's share of global output to 13% by the start of 2010 up from 7% currently, SAGIA added.

The state-controlled Saudi Basic Industries Corp., the world's largest chemical firm by market value, plans to nearly double its production to 100 million tonnes by 2015 by building plants in China, India and Saudi Arabia.

It also hopes for a 160% rise in revenues to SAR225 billion ($60 billion) by 2020 to become one of world's top three chemical producers.

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