Backtracking? Aramco, Sumitomo transfer ownership of impending $8.5 billion plant
Saudi Aramco and Sumitomo Chemical will transfer ownership of a planned SR32 billion ($8.5 billion) petrochemical facility to their joint venture PetroRabigh, the venture said on Sunday.
The new facility, known as Rabigh II, is to be built as an expansion of PetroRabigh’s existing petrochemical plant, increasing output and introducing higher-margin products.
The project, located on Saudi Arabia’s Red Sea coast, received a formal go-ahead from the parent firms in 2012. PetroRabigh has said previously it is due to come online in 2016, despite a string of maintenance problems at the existing facility.
Ownership of the planned new facility will be transferred from Aramco and Sumitomo to PetroRabigh in the fourth quarter of this year, the company said on Sunday.
However, it added that both Aramco and Sumitomo would continue to guarantee finance needed to build the project. The two firms will each put in around 100 billion yen ($975 million), with the rest coming from project financing, Sumitomo President Masakazu Tokura said last November.
Rabigh II will produce ethylene propylene rubber, thermoplastic polyolefin, methyl methacrylate monomer and polymethyl methacrylate among other products.
PetroRabigh’s existing plant can produce an annual 18 million tons of refined products and 2.4 million tons of petrochemical products.
The expansion of the $8.5 billion complex aims to increase output from the plant as well as introduce higher-margin products, was originally estimated to cost around $7 billion.
PetroRabigh said in a stock exchange filing that “total investment in the project is around SR32 billion according to current forecasts.”
The joint-venture, known as PetroRabigh, has had a number of setbacks because of maintenance issues in 2013 at its existing facility including power cuts and an outage at its ethane cracker.
Under the plan, Rabigh II will produce ethylene propylene rubber (EPR), thermoplastic polyolefin (TPO), methyl methacrylate (MMA) monomer, polymethyl methacrylate (PMMA) among other products.
PetroRabigh is a (50:50) joint venture between Saudi Aramco and Japan’s Sumitomo Chemical. The plant is valued at around US$10 billion and comprises 23 plants producing 18.4 million tons per annum (mpta) of petroleum-based products and 2.4 mpta of ethylene and propylene-based derivatives. Upon conversion, PetroRabigh’s products will go on to be used in such end products as: plastics, detergents, lubricants, resins, coolants, anti-freeze, paint, carpets, rope, clothing, shampoo, auto interiors, epoxy glue, insulation, film, fibres, household appliances, packaging, candles, film, pipes and thousands of other applications. The PetroRabigh plant is located on the Red Sea, on a 3,000 acre site occupied by an Aramco topping refinery.
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