Aramco, Sumitomo make giant strides on Rabigh II development

Updated 26 May 2012

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.


Oil surges on hopes of new deal on output cuts

Updated 02 June 2020

Oil surges on hopes of new deal on output cuts

  • Brent price has doubled in five weeks
  • OPEC talks may be brought forward

DUBAI: Oil prices surged toward $40 a barrel on Monday as hopes rose for an early agreement to extend the big production cuts agreed by Saudi Arabia and Russia under the OPEC+ alliance.

Brent, the global benchmark, jumped by more 9 percent to nearly $39, continuing the surge that has doubled the price in five weeks — the best performance in its history. It recovered after record supply cuts agreed between the 23 countries of the OPEC+ partnership, and enforced cuts in US shale oil.

DME Oman crude, the regional benchmark in which a lot of Saudi Aramco exports are priced, rose above $40 a barrel for the first time since early March.

Market sentiment was buoyed by the possibility that the Organization of Petroleum Exporting Countries would agree with non-OPEC members to extend the cuts for a longer period than was agreed in April.

Oil analysts expect OPEC to fast track a “virtual” meeting to formally agree to maintaining cuts at the record 9.7 million barrels a day level. The meeting was scheduled for June 9, but bringing it forward would allow producers more time to set pricing levels.

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An official with one OPEC delegation told Arab News there was consensus among the 23 OPEC+ members for the new date, which could be as early as June 4. The meeting will also consider how long the current level of cuts would be maintained. Some OPEC members want it to run to the end of the year, other producers would prefer a two-month extension.

Omar Najia, global head of derivatives with trader BB Energy, told a forum run by Gulf Intelligence consultancy: “I’d be amazed if OPEC did not extend the higher level of cuts. As long as Saudi Arabia and Russia continue saying nice things to each other I’d expect the rally to continue.”

A Moscow source close to the oil industry said energy officials there had come to the conclusion that “the deal is working” and it was important to keep prices at an “acceptable” level.

Sentiment was also affected by a comparatively high level of compliance with the new cuts, running at about 75 percent among OPEC+ members, with only Iraq and Nigeria noticeable under-compliers.

Robin Mills, chief executive of Qamar Energy, said: “That’s where I’d expect it to be after two months in such a fluid situation. It will be even better in June.”