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Business & Economics :: Latest News

May 15, 2008

Saudi Aramco/Total confirm Jubail Refinery Project

Gerald Ondrey

The Saudi Arabian Oil Company (Saudi Aramco; Dhahran, Saudi Arabia; www.saudiaramco.com) and Total (Paris, France; www.total.com) have both confirmed their decision to invest in a 400,000 bbl/d world-class, full-conversion refinery in Jubail, Saudi Arabia.

The refinery will process Arabian Heavy crude to high–quality refined products that will meet the most stringent global product specifications and is expected to begin operations at the end of 2012. The refinery will benefit from the proximity to the Arabian Heavy crude supply system and from the excellent facilities of the Jubail industrial city such as King Fahad Industrial Port, power and water grids and residential area.

In a comprehensive, joint Front-End Engineering and Design (FEED) study launched in May 2006, Saudi Aramco and Total have selected state-of-the-art proven technologies for a full conversion refinery scheme geared to maximizing the production of diesel and jet fuels. In addition, the project will produce 700,000 m.t./yr of paraxylene, 140,000 m.t./yr of benzene and 200,000 m.t./yr of polymer grade propylene.

A joint-venture company for the refinery will be formed during the third quarter of 2008.  Saudi Aramco will initially own 62.5% of the company and Total will own the remaining 37.5%. Subject to required regulatory approvals, the parties are planning to offer 25% of the company to the Saudi public while the two founding shareholders each intend to retain a 37.5% ownership interest. Saudi Aramco and Total will share the marketing of the refinery’s production.

Saudi Aramco and Total are planning to release invitations-to-bid for the project’s construction in June 2008 with a view to awarding all packages during the first quarter of 2009.  Orders for long-lead items will be placed as soon as the third quarter of 2008. The project will be introduced to the lending community in the second part of 2008 with a targeted financial close in early 2009.

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