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Total SA
In May 2008, Saudi Aramco and French energy giant Total confirmed a major investment in a world-class, full-conversion refinery in Jubail, Saudi Arabia with planned capacity of 400,000 bpd.
Expected to come online in 2012, the refinery will process Arabian Heavy crude to high-quality refined products including diesel and jet fuels. The project will also produce 700,000 metric tons per year (t/y) of paraxylene, 140,000 t/y of benzene and 200,000 t/y of polymer grade propylene.
According to Total, “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.”
On the demand side, the project will benefit from “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”, according to Michel Bénézit, President of Total Refining and Marketing.
After an initial period during which Saudi Aramco will take a 62.5% stake in the joint venture, 25% ownership will be offered to the public. The two founding shareholders will each retain a 37.5% interest, and will share marketing rights.
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ConocoPhillips
In May 2008, Saudi Aramco and U.S. energy giant ConocoPhillips announced a funding agreement for the development of the Yanbu Export Refinery Project. The grassroots full-conversion refinery, located in Yanbu Industrial City, will process Arabian Heavy crude supplied by Saudi Aramco.
The refinery would produce high-quality, ultra-low sulfur refined products designed to meet current and future product specifications. Saudi Aramco and ConocoPhillips would each be responsible for marketing one half of the refinery's production. The refinery is targeted to commence production in 2013.
“ConocoPhillips is pleased to continue working with Saudi Aramco towards adding needed capacity to the international refining system,” said Jim Gallogly, executive vice president of refining, marketing, and transportation for ConocoPhillips. “The Yanbu project fits well with the company’s overall strategy to invest in projects that expand our global refining presence and provide significant new supplies of clean products in an environmentally sound manner.”
The planned joint venture provides equal interests to own and operate the proposed refinery. Subject to required regulatory approvals, the parties plan to offer an interest in the refinery to the Saudi public.
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Dow Chemical
Founded in 1897, the Dow Chemical Company engages in the manufacture and sale of chemicals, plastic materials, agricultural, and other specialized products and services worldwide.
In 2007, Dow and Saudi Aramco agreed to develop the Ras Tanura Integrated Project, one of the world’s largest grassroots plastics and chemicals production complexes. The facilities will produce an array of basic and performance chemicals, including ethylene, propylene, aromatic, and chlorine derivates with an initial focus on polyethylene, ethylene oxide and glycol, propylene oxide and glycol, chlor-alkali, vinyl chloride monomer, polyurethane components, epoxy resins, polycarbonate, amines and glycol ethers.
The joint venture, located in Saudi Arabia’s Eastern Province, will source feedstock from Saudi Aramco’s Ras Tanura refinery complex and its Ju’aymah gas processing plant. In addition to serving a variety of major world markets, the project is also expected to support further development of Saudi Arabia’s downstream petrochemicals sector. Dow Chairman and CEO Andrew Liveris expects the complex to benefit from its “long-term, secure and reliable feedstock position.”
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Saudi Aramco
Early in the decade, Saudi Aramco began examining development opportunities for a 3,000-acre oil refinery located at Rabigh, 165 kilometers north of Jeddah. Strategically situated on the Red Sea with its own deep-water port, the Rabigh refinery enjoyed an unusually abundant and stable on-site supply of feedstock. However, these natural advantages were previously under-exploited, as feedstock was converted into low-value petroleum derivatives or, in the case of natural gas, simply burned off.
Japan’s Sumimoto Chemical, a world petrochemicals leader, was able to leverage its state-of-the-art technology and expertise in petrochemicals marketing to help Saudi Aramco put the Rabigh refinery to more lucrative use. With $2.5 billion in project financing from the Japan Bank for International Cooperation (JBIC), Sumimoto and Aramco created Petro Rabigh, a joint venture to upgrade the Rabigh facility for production of refined petrochemicals.
The site’s enviable access to both low-cost feedstock and international transportation routes is expected to support strong operating efficiencies when production begins in October 2008. With strong demand, anticipated plans are already underway to further expand Petro Rabigh’s capacity.
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Japan Bank for International Cooperation
In 2006, the Japan Bank for International Cooperation (JBIC) signed a project financing agreement of up to US$1,170 million with Saudi Arabia’s Eastern Petrochemical Company (SHARQ) to finance an expansion of one of the world’s largest ethylene glycol and polyethylene production facilities.
SHARQ, a Japanese-Saudi joint venture, was established to improve the competitiveness of Japan’s chemicals industry by allowing facilities to be cost-effectively located in proximity to feedstock supplies.
This was the second time JBIC had extended financing to SHARQ, following an initial US$750 million loan approved in 1999 for an earlier expansion. The completion of the expansion project, located in the Industrial City of Al-Jubail on the east coast of Saudi Arabia, brings SHARQ to 10 times its initial capacity.
The success of SHARQ is an excellent example of the ability of Saudi Arabia’s resource endowments and world-class infrastructure to support scalable profit opportunities for foreign investors.
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Sumitomo Chemical
Saudi Aramco and Sumitomo Chemical joined forces to develop one of the world’s largest integrated refining and petrochemical complexes at Rabigh on Saudi Arabia’s Red Sea coast. The complex will produce 2.2 million tons of olefins in addition to gasoline and other refined products.
To meet the demands of the complex, an oil-fired cogeneration and desalination plant is being developed.
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SABIC
In 2007, Ma’aden finalized contracts for the construction of the world’s largest fully integrated fertilizer production operation. The project is being jointly undertaken by a partnership between Saudi industrial companies Ma’aden and SABIC, and will produce 3 million metric tons of di-ammonium phosphate (DAP) fertilizer.
The complex will include a DAP granulation plant, a phosphoric acid plant and a sulfuric acid plant. Phosphates will be extracted from the Jalamid area of central-northern Saudi Arabia.
When completed, the venture is expected to take over 20% of the global phosphate-based fertilizer market.
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Rio Tinto Alcan
In 2007, Rio Tinto Alcan and Saudi Arabian mining company Ma’aden agreed to a US$7 billion joint venture to develop a fully integrated, “mine-to-metal” project including a 30-year bauxite reserve, alumina refinery, power plant, and aluminum smelter.
The industrial facilities will be located in the new Minerals Industrial City at Ras Az Zawr, on the east coast of Saudi Arabia. Ma’aden is targeting 2012 for the smelter’s start-up.
In addition to a 49% ownership stake, Rio Tinto Alcan brings technology and operational support to the project. CEO Dick Evans cited Saudi Arabia’s “ideal combination of competitive energy resources, local bauxite, well-developed infrastructure and favorable logistics," noting that the project has the potential to achieve an industry-leading operating cost profile. Energy typically accounts for up to 40% of aluminum production costs.
The smelter is designed to accommodate expansion to over two million tons per year, making it potentially one of the world’s largest. The partnership between Rio Tinto Alcan and Ma’aden demonstrates how foreign technical expertise can combine with Saudi Arabia’s world-class access to raw materials and end markets to drive long-term returns on investment.
Rio Tinto Alcan is the global leader in aluminum, with worldwide assets, innovative engineered solutions and a strong portfolio of growth projects.
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Aluminum Corporation of China
In late 2007, MMC International Holdings Limited and Saudi Binladin Group (SBG) signed an Agreement with Aluminum Corporation of China Limited (Chalco) to develop, own and operate an aluminum smelter at Jazan Economic City (JEC) at a cost of US$3 billion, with annual production capacity of 1 million metric tons.
The joint venture will be shared by Chalco (40%), MMC (20%) and a Saudi consortium led by SBG (40%). This joint venture brought total capital invested in JEC to US$20 billion—two-thirds of the planners’ 25-year target sum. The integrated smelter-power station complex represents the largest investment by a Chinese company in the Kingdom.
Jazan Economic City’s low-cost electricity is expected to substantially reduce the aluminum smelter’s production costs. Chalco will supply a secure source of alumina, as well as guaranteed demand for the aluminum produced. The investment in the complex is a direct result of China’s galloping demand for aluminum (consumption grew by 46% year-on-year in the first nine months of 2007).
For MMC, the investment offers an expected internal rate of return of 20%, according to a research analyst at OSK Investment bank. OSK Research upgraded MMC’s stock to a “buy” on the news.
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National TriGeneration CHP Company
NTCC is a closed joint stock company with a capital of SAR 525.000.000 and a total Energy Service Provider specialized in BOT and BOO of Power, Cooling/Steam and/or Water Desalination. NTCC is also authorized by ECRA (Electricity and Cogeneration Regulatory Authority in Saudi Arabia) to build and operate Tri-Generation Plants in any part of the Kingdom
Energy is NTCC’s core business. We deliver value, efficiency, improved reliability, and peace of mind to our customers. NTCC recognizes that customers want more than energy commodities. They want a trusted business partner who understands their long-term energy needs and how these needs relate to their business strategy.
NTCC provides economical and environmentally responsible energy solutions to commercial, industrial and government customers including hospitals, colleges and universities, municipalities, prestigious office towers, renowned hotels, sports arenas, convention centers and residential complexes. |