Saudi Aramco has signed an agreement with Sumitomo Chemicals of Japan for a feasibility study for a three-billion-dollar petrochemical and refining project at Rabigh, about 70 miles north of Jeddah, as part of a planned expansion of Aramco’s refinery there. Sumitomo was one of three companies short-listed, the other two being Saudi Basic Industries Corporation (SABIC) and Dow Chemicals of the United States.
The project, one of the largest private investments in the Kingdom, will be Aramco's first foray into the domestic petrochemical sector. The facility is expected to produce an annual one million tons of ethylene, a basic ingredient for petrochemical products. The ethylene will be processed from ethane extracted from natural gas. The plant would also produce such plastics as polyethylene, used in packaging.