Aramco, Sumitomo make giant strides on Rabigh II development

Updated 26 May 2012
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Aramco, Sumitomo make giant strides on Rabigh II development

DHAHRAN: Saudi Aramco, together with its partner Sumitomo Chemical, have made significant progress on the feasibility of the Rabigh Phase II Project and will proceed to implement the expansion of a world-class petrochemical complex on the Kingdom's west coast.
Rabigh II will complement Saudi Aramco’s existing petrochemical investment portfolio especially in light of the Rabigh I petroleum refining and petrochemical production complex, currently owned by Rabigh Refining and Petrochemical Company (PetroRabigh), a joint stock company initially founded by Saudi Aramco and Sumitomo Chemical.
The Rabigh II feasibility study and front-end engineering design work were jointly undertaken and funded by Saudi Aramco and Sumitomo. As part of the next phase implementation of Rabigh II, Saudi Aramco and Sumitomo Chemical are finalizing various project milestones, including contracts for engineering, procurement and construction and other project-related agreements, as well as project financing.
Utilizing leading-edge technologies from Sumitomo Chemical and other companies, Rabigh II will explore maximization of existing synergies, the utilization of Saudi manpower, and development of the Kingdom's conversion industries.
“Our long standing partnership with Sumitomo Chemical continues to make further inroads with Rabigh II representing a significant milestone in Saudi Aramco’s downstream portfolio expansion and diversification strategy,” said Saudi Aramco CEO Khalid A. Al-Falih. “Both sponsors are thankful to the Ministry of Petroleum and Mineral Resources for their continued support for Rabigh’s expansion projects, and through which we endeavor to create further value for our stakeholder communities in the Kingdom with new businesses, entrepreneurial and job opportunities.”
Rabigh II’s development will include a new aromatics complex and an expanded facility to process 30 million standard cubic feet per day of ethane and approximately 3 million tons per year of naphtha as feedstock to produce a variety of high value-added petrochemical products. The total project investment is currently projected to reach approximately $7 billion.
The project is expected to begin operations in the first half of 2016. It is envisaged that PetroRabigh will be approached in due time and presented with the opportunity to serve as the project company for Rabigh II subject to PetroRabigh’s independent evaluation of the project feasibility results and separate corporate and regulatory approval procedure.
Rabigh II’s main products will be ethylene propylene rubber, thermoplastic polyolefin, methyl methacrylate monomer, polymethyl methacrylate, low density polyethylene/ ethylene vinyl acetate, para-xylene/benzene, cumene and phenol/acetone. Additionally, Saudi Aramco and Sumitomo Chemical will continue to implement other product lines on optimal schemes to realize further project optimization.


Singapore Airlines finds premium economy a tougher sell on new non-stop US flights

Updated 18 min 31 sec ago
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Singapore Airlines finds premium economy a tougher sell on new non-stop US flights

  • The carrier last month resumed after five years the world’s longest commercial flight
  • It represents a major expansion in the US market for Singapore Airlines

SINGAPORE: Singapore Airlines is facing no problem selling business-class tickets on its ultra-long non-stop flights to the United States but is having to price premium economy seats very attractively, a senior executive said on Wednesday.
The carrier last month resumed after five years the world’s longest commercial flight, an almost 19-hour non-stop journey from Singapore to New York.
The airline ordered seven new ultra-long-range twin-engine Airbus SE A350-900ULRs fitted with just 67 business class and 94 premium economy seats for those flights and for non-stop services to Los Angeles and San Francisco. These flights have no economy class seats.
It represents a major expansion in the US market for Singapore Airlines and a test of whether the carrier can charge the 20 percent price premium that travel industry data shows is typical for ultra-long non-stop services due to their popularity with time-sensitive business travelers.
Singapore Airlines Executive Vice President Commercial Mak Swee Wah said there was existing demand for business class which he expected would continue to pick up.
For premium economy, however, he said some markets were not “entirely familiar” with the product, which offers more leg room and other amenities than economy class.
“I think we need to continue to stimulate and encourage the market to consider this product, initially with very attractive pricing, but eventually I think people will see that even at prices which we offer it is a good product to purchase because it is a very long flight,” he said at an analyst and media briefing.
His comments came after Singapore Airlines reported on Tuesday an 81 percent plunge in second-quarter net profit, hurt by higher fuel prices, lower airfares and non-cash losses at its part-owned Virgin Australia Holdings Ltd.
Yields, a proxy for ticket prices, fell 2.2 percent in the second quarter compared with a year earlier, failing to help offset the impact of a 24 percent rise in fuel prices.
Singapore Airlines is offering premium economy fares as low as S$1,698 ($1,230.17) return from Singapore to New York for weekday travel over part of the peak Christmas travel period, according to its website.
That is in line with economy class fares from premium rivals like Hong Kong’s Cathay Pacific Airways Ltd. and Dubai-based Emirates that require a stop and a longer travel time, according to a Reuters search on Expedia.
When it previously flew to New York and Los Angeles non-stop on four-engined A340-500 jets that used more fuel, it had initially offered both “executive economy” and business class but later switched to all business class. Those flights were abandoned in 2013 when high fuel prices made them uneconomic.
A Singapore Airlines spokesman said on Thursday that the airline constantly reviewed its cabin configurations.
“However, at this point we are confident we have the right balance with business class and premium economy class seating on our A350-900ULRs, and there are no plans to change it,” he said.