JEDDAH, 24 November 2005 — Saudi Aramco has earmarked over SR18 billion ($4.8 billion) to establish and operate an oil refinery in the Western region, according to a statement by the Royal Commission for Jubail and Yanbu.
The refinery, which involves a capital investment of SR18.75 billion, will have a capacity of 400,000 barrels per day of petroleum products and will create 750 new jobs.
“The project will contribute to the development and progress of the industrial town of Yanbu in the west of the Kingdom,” the Royal Commission said. “This is one of the projects at Yanbu-II industrial city launched by Custodian of the Two Holy Mosques King Abdullah a few months ago, and it is considered one of the largest in the Western region,” said a source at the commission.
The commission has allocated a 400-hectar land for setting up the project in the new industrial city. “The project is in the initial stage and is expected to be completed and begin operation by the end of 2007,” the source said.
The announcement on the new refinery follows a statement by Minister of Petroleum and Mineral Resources Ali Al-Naimi, who said the Kingdom was committed to increasing its production from 11 million to 15 million barrels per day.
He said the country had plans of constructing export refineries to process heavy and sour crudes. Saudi Arabia has eight refineries with a capacity of around 1.75 million barrels per day.
Yanbu-II is expected to attract investments worth SR115 billion when it is complete in 2020. King Abdullah, while he was crown prince, laid the foundation stone of the new industrial city. He also launched a number of industrial projects worth SR44 billion by RC, Saudi Basic Industries Corporation (SABIC) and a group of private companies.
Yanbu-II will cover an area of 66 square kilometers and is expected to house 34 basic and secondary industries and 224 light industries.
Yanbu National Petrochemical Company (Yansab) is another major project under construction in Yanbu-II. SABIC has 55 percent stake in Yansab, which will float 35 percent of its capital in an Initial Public Offering.
This SR19 billion project will have a production capacity of over four million tons annually of ethylene, propylene, polyethylene, polypropylene, ethylene glycol, benzene, toluene, butane, and zaylene. To be completed by the end of 2007, Yansab will employ 1,500 workers.
The Royal Commission plays a vital role in the Kingdom’s economic and industrial development by its excellent management of the twin industrial cities of Jubail and Yanbu.
The two state-of-the-art cities were instrumental in attracting a large amount of domestic and foreign investment and transfer of foreign technology.
The two cities make 60 percent of the total contribution of the industrial sector to the gross domestic product (GDP) or 14 percent of the non-oil GDP. Yanbu-II will create thousands of job opportunities.
