DHAHRAN: Saudi Aramco will decide next year whether to go ahead with a $20 billion venture with Dow Chemical Co. and the expansion of another project, company officials said. Dow and Aramco are conducting design and engineering studies on a proposed facility that will have capacity to produce about 3.7 million metric tons of chemicals annually, Abdulaziz Al-Judaimi, Aramco's vice president responsible for chemicals, said in Dubai Wednesday. The partners aim to make final investment decisions on the project after reviewing costs by July next year, he said. The project's budget “is approaching $20 billion,” Aramco Chief Executive Khalid Al-Falih said at a conference in Dubai. Gulf oil producers including Saudi Arabia and the United Arab Emirates are diversifying their economy to include industries in order to reduce reliance on oil exports as well as create employment. New petrochemicals facilities will help Saudi Arabia create value out of its crude, Al-Falih said. About $6 billion to $8 billion is earmarked for investment in an expansion of the Rabigh Refining and Petrochemicals Co. venture, Al-Falih said. The project, known as Petro Rabigh, will boost production capacity to 3.7 million tons of petrochemicals a year, al- Judaimi said. Petro Rabigh, in which Aramco and Sumitomo Chemical Co. each own 37.5 percent stakes, now produces about 1.3 million tons of ethylene. The partners may begin awarding work contracts for the expansion next year, he said. Aramco is also looking for partners to develop an export refinery and potential chemical integration at Yanbu on the country's Red Sea coast, Al-Judaimi said. ConocoPhillips pulled out of the project earlier this year and Aramco has since gone ahead to award some construction contracts for the facility. The company aims to develop petrochemical capacity alongside its refineries and is evaluating projects both inside and out of the Kingdom, he said. Aramco and Dow plan to build one mixed-feed cracker at the Jubail site that will use ethane and naphtha to produce petrochemicals. Aramco and Total are going ahead with a $12 billion, 400,000 barrel-a-day refinery and chemical project in the same industrial city. The $15 billion joint venture has endured a few setbacks in the past, but now looks ready to move forward.
