Japanese, Saudi Arabian Firms Planning Petrochemical Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--Japanese Sumitomo Chemical and Saudi Aramco are holding talks on Sumitomo's added investment of $1.8 billion into their joint petrochemical project in Saudi Arabia. Petro Rabigh Industrial Zone, the joint-venture oil and petrochemical industry park on the banks of the Red Sea, was constructed in 2005 with a total investment exceeding $10 billion. The Rabigh refinery, which is already in production, processes 400,000 barrels of crude oil per day, accounting for 19% of Saudi Arabia's total oil processing capacity. Presently, construction of the petrochemical project at Rabigh is being carried out in full swing. The project is equally owned by Aramco and Sumitomo. The unit is expected to go into production in 2008.

Sumitomo Chemical and Aramco also plan to build a plant in Saudi Arabia that will produce synthetic resin used in digital products and automobiles and other chemical products. If plans go smoothly, the plant could begin production as early as 2012. Its major market destinations are China, the Middle East and Europe.

Sumitomo said in November 2007 that it expects to make more profits from the high oil price and that it hopes to bring in $54 million in profit this year in its joint venture with Aramco.

In 2005, Shanghai Engineering Company and Second Construction Company at China National Petroleum and Chemical Corporation (Sinopec) (Beijing) and Dutch AK Company jointly won the engineering, procurement and construction contract to build SABIC's 400,000-ton-per-annum polyethylene and polypropylene project. The 31.5-month contract cost $760 million. The project is located in Yanbu, Saudi Arabia. In March 2008, the project will be completed and launched. This is the first petrochemical construction contract Sinopec has signed with Saudi Arabia. Sinopec is responsible for 50% of the project's total investment.

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