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Saudi Aramco $ 5 billion PetroRabigh expansion well in progress

PetroRabigh II and Sadara to double Saudi Aramco petrochemical production

The PetroRabigh expansion, or PetroRabigh II, is a joint venture between Saudi Aramco and the Japanese Sumitomo Chemical while the greenfield project Sadara actually under construction is a joint venture with Dow Chemicals.

But the both projects are designed to almost double Aramco’s chemicals manufacturing capacity and would add a number of new products in the Middle East by 2015.

Both projects are equally complex by the size and the number of units to operate.

PetroRabigh II project is part of state-run Saudi Aramco‘s plans to implement its upstream-downstream integrated business model through chemicals, unconventional gas and renewables, to diversify its business from oil alone.

Anyway PetroRabigh is not fully owned by Saudi Aramco since the working interests are shared between:

 – Saudi Aramco 37.5%

 – Sumitomo Chemical 37.5%

 – Public shareholders 25%

In this context the final investment decision (FID) cannot be made by Saudi Aramco only based on the political or social agenda to create jobs.

The PetroRabigh expansion must also be proven to be a profitable project for all involved parties.

KBR and JGC completed PetroRabigh II FEED

KBR from USA made the basic design consultancy and JGC from Japan completed the PetroRabigh phase II front end engineering and design (FEED) which ended up with an estimated capital expenditure of $6.6 billion.

But the bids submitted by the engineering companies have helped to revise this amount down to $5 billion.

JGC is also providing Project Management Services.

This financial downsizing is beneficial to the FID in preparation.

Actually PetroRabigh‘s facility includes a:

400,000 b/d refinery

 – 1.3 million t/y ethylene

 – 900,000 t/y Propylene

 – 700,000 t/y of polypropylene (PE) plant

 – 600,000 t/y of linear low density polyethylene (LLDPE)unit

 – 200,000 t/y of propylene oxide (PO) facility.

For this expansion, PetroRabigh plans to double petrochemicals capacity to 3.7 million t/y in building a number of petrochemical plants including:

 – A debottlenecking of the existing  1.3 million t/y Stone and Webster-technology ethane cracker by additional 300,000 t/y

 – An aromatics complex consuming around 3 million t/y of naphtha

 – A 30% increase in ethylene production capacity.

Saudi Aramco and Sumitomo expect the project to be completed by the fourth quarter of 2015.

Daelim, GS E&C,Petrofac and Saipem awarded EPCs

After a long period of evaluation, Saudi Aramco and Sumitomo are now progressing in awarding letter of intent for the Engineering, Procurement and Construction (EPC) contracts for this PetroRabigh II.

The expansion has a revised estimated capital expenditure of $5 billion and consists of seven process units and three associated utilities projects:

 – CP1 (caprolactam and nylon) and CP2 (275,000t/y phenol and cyclo hexane) awarded to Daelim Industrial for $1.2 billion

 – CP3 (ethylene-vinyl acetate and 600,000t/y low density polyethylene (EVA/LDPE), ethylene propylene (EPR)) and CP4 (methyl tert-butyl ether (MTBE/IB), methyl methacrylate (MMA) packages should go to GS Engineering and Construction (GS E&C) for $1.3 billion.

 – UO1 (Offsites and utilities) package is also awarded to GS E&C. With this additional package GS E&C total award reaches $1.78 billion.

 – RP2 (Naptha Reformer Unit and Aromatics Complex (850,000 t/y of paraxylene, up to 400,000 t/y of benzene)) $1 billion package has been awarded to the Italian Saipem. The scope of work includes the Engineering, Procurement and Construction (EPC) of two processing units.

 – UO2 (Tank farm) and UO3 (common utilities) packages is awarded to Petrofac for $500 million. 

With these letters of intent to South Korean Daelim, GS E&C and Italian Saipem, Saudi Aramco and Sumitomo are conducting final negotiations with engineering companies to award the last packages in the meantime to prepare the final investment decision (FID) with revised capital expenditure to meet political and economical PetroRabigh II requirements.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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