Saudi Aramco and Total on Wednesday confirmed their decision to invest in a 400,000-barrel-per-day 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.
"At Saudi Aramco we are pleased to announce our commitment to strengthen our strategic partnership with Total by moving forward with the Jubail export refinery project. Our vision of this world-class refinery is to further expand the Kingdom's refining and petrochemical infrastructure and create job opportunities here at home. This facility will provide our customers, both domestic and international, with high quality fuels and petrochemicals," Khalid G. Al-Buainain, Saudi Aramco Senior Vice President of Refining Marketing and International said.
"Launching this project is a major achievement, enabling Total and Saudi Aramco to build a strong strategic partnership. By developing this world-class project in Jubail, Saudi Aramco and Total will contribute to supply growing demand for transportation fuels and petrochemicals, especially in Asia and the Middle-East, but also in Europe where the deficit of diesel is growing," declared Michel Benezit, President of Total Refining and Marketing.
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 tonnes per year (t/y) of paraxylene, 140,000 t/y of benzene and 200,000 t/y 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.