NBD has developed a number of projects which are aimed at adding value to the Kingdom's hydrocarbon resources. Some of the major recent achievements are the following projects:
PETRORabigh
The PETRORabigh project is one of the largest of its kind ever planned. This business model envisions extraordinarily productive and profitable synergies in joining the Kingdom's crude oil and gas system with petrochemical production. The project, a major upgrade and expansion of Saudi Aramco's existing Rabigh Refinery, is a joint venture between Saudi Aramco and Sumitomo Chemical Co. Ltd. of Japan. Saudi Aramco will supply the project with crude oil, ethane and butane feedstock, and will initially market the refined output of PETRORabigh. Sumitomo will provide its proprietary petrochemical technology and marketing base of petrochemical products.
This project is one of the world's greatest integrated oil refining and petrochemical projects built in one stroke. The project involves development and modernization of the existing refinery so that it can refine Arabian Light crude oil to produce high-value light petroleum products. It also involves construction of a mega-petrochemical complex, as well as the infrastructure required for further downstream and secondary industries. This will provide attractive opportunities for both Saudi and foreign private investors.
The March 2006 groundbreaking ceremony was the culmination of nearly two years of preparation for the project. A joint feasibility study began in May 2004, with the signing of a Memorandum of Understanding, followed, after completion of the study, by the signing of the joint venture agreement in August 2005. The joint venture was officially formed in September 2005. An agreement to secure project financing facilities totaling $5.8 billion was signed in London in March 2006, with Japan Bank for International Cooperation (JBIC), Public Investment Fund of Saudi Arabia (PIF) and 17 financial institutions. Petro-Rabigh officially began operations in May 2009 as it shipped 19,200 metric tons of monoethylene glycol (MEG) to China.
When completed, the project will produce 2.4 million tons per year of petrochemical solids and liquids, plus large volumes of gasoline and other refined products. Rabigh Refinery currently has a nominal crude distillation capacity of 400,000 barrels per day. Project plans include a high olefins yield catalytic cracker complex integrated with a world-scale, ethane-based cracker, producing approximately 1.3 million tons per year of ethylene, 900,000 tons per year of propylene, and 60,000 barrels per day of gasoline and other refined products.
The petrochemical ethylene is primarily used in the process of manufacturing polyesters for fibers, films, bottles and other such products, and also in antifreeze formulation. Propylene is used as an intermediate chemical in the production of polyurethane foam for furniture, automobiles, coatings, adhesives and sealants, and in inks, polyester resins, pharmaceutics, de-icing agents and many other essential products.
Olefin derivative units included in the project configuration include: Sumitomo's Easy Processing Polyethylene (EPPE) unit, a linear low-density polyethylene (LLDPE) unit, a high-density polyethylene (HDPE) unit, two propylene units producing a full range of polymers, a propylene oxide unit utilizing Sumitomo's proprietary technology, a mono-ethylene glycol (MEG) unit and a butane-1 unit.
Building on their success, the two partners have announced the Rabigh II Project, a major expansion of PETRORabigh (Rabigh Phase I). A feasibility study for the new project is expected to be completed by the third quarter of 2010.
The new venture will consider increasing the capacity of the existing ethane cracker to take in an additional 30 million cubic feet per day of feedstock ethane. In addition, it will consider building a new aromatics complex using around 3 million tonnes per year of naphtha as feedstock, and will also look at constructing various petrochemical units.
Assuming the project is proven viable, Rabigh II is expected to be completed by the third quarter of 2014.
For more information on PETRORabigh please visit http://www.petro-rabigh.com/
This proposed project represents an excellent opportunity to build on the Kingdom's strategy of addressing global energy demand while attracting foreign investment to expand its economy.
In-Kingdom refineries, such as the Jubail joint venture, have the location advantage to effectively and efficiently supply both international and domestic demand. This facility in particular, with its ability to process large quantities of heavy crude, not only eases tight refining capacities but also addresses the mismatch between available crude supplies and refinery configurations that is complicating today's market situation. The full-conversion refinery will maximize production of diesel and jet fuels, and will also produce 700,000 tons per year (t/y) of paraxylene, 140,000 t/y of benzene and 200,000 t/y of polymer-grade propylene.
The project adds value to the local economy through job creation and opportunities for further downstream investments by local businessmen. It is estimated that the refinery will create approximately 1,200 direct employment opportunities in the Kingdom, each of which typically creates five to six indirect job opportunities.
On May 6 and May 8, 2008, respectively, the Executive Committee of Total and the Board of Directors of Saudi Aramco decided to launch the project, and on June 22, 2008, a Shareholder Agreement was signed in Jiddah, Saudi Arabia, by Saudi Aramco and Total S.A.
Following the signing of the agreement, SATORP was formed during the third quarter of 2008, and the project remains on schedule. Saudi Aramco and Total will ultimately own 37.5 percent of the company each. Subject to required regulatory approvals, Saudi Aramco plans to offer 25 percent of the company to the Saudi public in an Initial Public Offer (IPO) during the last quarter of 2010. The MOU sets out the agreement between Saudi Aramco and Total regarding the key parameters of the project, the project configuration, and a broad range of the major technical, commercial, legal, and financial terms. To proceed as quickly as possible with the project, the two parties have agreed to undertake without further delay a comprehensive joint front-end engineering and design (FEED) study. The definitive documents to implement the project will be negotiated in parallel with the joint FEED study.
In May 2006, Saudi Aramco and ConocoPhillips signed a comprehensive Memorandum of Understanding (MOU) to conduct a detailed evaluation for the proposed development of a 400,000 barrels per day, full-conversion refinery in Yanbu', Saudi Arabia.
The refinery would be designed to process Arabian Heavy crude and produce high-quality, ultra-low sulfur refined products that meet current and future U.S. and European product specifications. The project is targeted to start up in 2011.
The MOU sets forth the agreement between Saudi Aramco and ConocoPhillips regarding the key parameters of the project, the project configuration, and a broad range of the major technical, commercial, legal and financial terms.
The proposed project represents an opportunity for the world's largest producer of hydrocarbons and ConocoPhillips to work together to construct a state-of-the-art, full-conversion, heavy crude refinery to serve multiple markets with high-quality, refined products in an environmentally sound manner. For Saudi Arabia, this project would not only add value to the Kingdom’s petroleum product exports, it would also be a platform for increased industrial development in the Kingdom. In addition to attracting foreign investment to the Kingdom of Saudi Arabia, the project is expected to expand its economy and provide increased job opportunities for Saudi nationals.
The Ras Tanura petrochemical joint venture will be operationally integrated with Saudi Aramco's Ras Tanura Refinery complex and its Jua’ymah gas processing plant, two of the largest facilities of their kind in the world. The latter two facilities will supply feedstock to the joint venture and continue to be owned and operated by Saudi Aramco. When fully operational, the new complex will be one of the largest grassroots plastics and chemicals production facilities in the world and will be ideally positioned to serve major world markets.
RTIP will produce a broad range of both basic and performance products, including ethylene, propylene, aromatic and chlorine derivatives and introduce new value chains and performance products to the Kingdom. The initial project scope includes world-scale production units for polyethylene, ethylene oxide and glycol, propylene oxide and glycol, chlor-alkali, vinyl chloride monomer, polyurethane components, epoxy resins, polycarbonate, amines and glycol ethers.
A conversion industries park will also be developed adjacent to the large industrial complex at Ras Tanura. This park will provide business opportunities for small to medium sized industries that are either consumers of products or provider of value added services to RTIP.
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