For Immediate Release
Saudi Arabian Oil Company
Sumitomo Chemical Company, Limited
Saudi Aramco and Sumitomo Chemical sign joint venture agreement toForm the Rabigh Refining and Petrochemical Co. (Petro-Rabigh)
DHAHRAN, SAUDI ARABIA (August 1, 2005) – The Saudi Arabian Oil Company(Saudi Aramco) and Sumitomo Chemical Co., Ltd. (Sumitomo Chemical) today
signed an agreement to become joint venture partners in the development of alarge, integrated refining and petrochemical complex in the Red Sea town ofRabigh, on the Kingdom’s west coast.
The joint venture agreement follows the successful completion of a joint
feasibility study, during which both companies performed front end engineering
design and verified the viability of the project. The joint feasibility study began on
May 9, 2004, when Saudi Aramco and Sumitomo Chemical signed amemorandum of understanding to launch the effort.
The project has moved to an early phase of execution with the recent award ofmultiple engineering, procurement and construction (EPC) contracts. Whencompleted in late 2008, the Rabigh Project will be one of the largest integrated
refining and petrochemical projects ever to be built at one time. A total of 2.4
million tons of petrochemical solids and liquids, along with large volumes ofgasoline and other refined products, will be produced. Also, this project hascreated third-party investment opportunities in Saudi Arabia’s private sector for
utilities and other related infrastructure.
For Saudi Aramco and Sumitomo Chemical, the project represents anopportunity for the world’s largest producer of hydrocarbons to partner with aleading world-class petrochemical producer.
It presents an opportunity for increased industrialization in Saudi Arabia and aplatform for broad downstream conversion industry development in the Kingdom.
This Project represents a concrete example of the Kingdom’s strategy of
attracting foreign investment to expand its economy and provide increased job
opportunities for Saudi nationals. It is also consistent with the objective ofcreating opportunities for private local investment in service and other relatedindustries.
Through this joint venture, Sumitomo Chemical, a major producer of polyolefins,will secure a reliable and stable supply of feedstock to strengthen its mediumand long-term competitiveness. This project constitutes an important step
forward in enhancing the global competitiveness of the company’s petrochemicaloperations. Although Sumitomo Chemical has been operating a large-scalecomplex in a petroleum-refining center, Singapore, since 1984, the Rabighproject is the company’s first step to establish a foothold in an oil and gasproducing country, thereby assuring stable feedstock supply for its operations.
The project will, therefore, open a new stage in Sumitomo Chemical’s worldwide
business strategy.
Background
Saudi Aramco currently owns and operates a topping refinery at Rabigh with anominal crude distillation capacity of 400,000 barrels per day. The existing siteand infrastructure will serve as the base platform for the development of theRabigh Project.
Saudi Aramco studied various upgrade alternatives for the refinery since thecompany became its owner in June, 1995. These studies led to the conclusionthat the best alternative to capture the synergies of the existing large crude
capacity, together with significant investment in site and infrastructure, would beto expand the site into a large, fully-integrated refinery and petrochemicalcomplex.
Agreement of the Parties
Saudi Aramco and Sumitomo Chemical have agreed to form a Saudi Arabian
limited liability joint venture company with equal ownership. Saudi Aramco andSumitomo Chemical successfully negotiated the joint venture to implement theRabigh Project in parallel with the joint feasibility study, which confirmed theProject’s technical, marketing and economic viability, as well as its capital andoperating costs, among other factors. The new Company will be called theRabigh Refining and Petrochemical Company, or for short Petro-Rabigh.
The ProjectIn addition to contributing its world-class capabilities in hydrocarbon production
and refining, and its decades-long experience of collaboration with the Kingdom’s
petrochemicals industry, Saudi Aramco will supply the Rabigh Project with crudeoil, ethane and butane and will market the refined products produced by theRabigh Project. Sumitomo Chemical will provide its extensive and proprietary
petrochemical technology and marketing base to the venture.
The initial plans for the Project include, as the centerpiece of the expanded site,a high olefins yield fluid catalytic cracker complex integrated with a world scale,ethane based cracker, producing approximately 1.3 million tons per year ofethylene, 900,000 tons per year of propylene, and 60,000 barrels per day ofgasoline as well as other refined products. Downstream petrochemical units areto be included to convert all of the olefin production to downstream products.

The following olefin derivative units are included in the project configuration:1) Sumitomo’s proprietary Easy Processing Polyethylene (EPPE) unit.
2) An LLDPE unit.
3) An HDPE unit.
4) Two polypropylene units, producing a full range of polypropylene
polymers – homopolymer, block copolymer, random and terpolymer.
5) A propylene oxide unit utilizing Sumitomo’s proprietary technology.
6) A Mono-Ethylene Glycol (MEG) unit.
7) A Butene-1 unit.
The joint feasibility study has confirmed the Project’s attractiveness supported by
its economies of scale, synergies between refining and petrochemicals, available
infrastructure as well as the positive outlook of petrochemical products.
The companies have awarded several EPC contracts for the major process
plants and the utilities facilities, as well as retaining a Project Management
Services Contractor and other necessary advisors to proceed with the executionof the project on an expedited basis. Construction will commence during the firstquarter of 2006.
###Note to editors: Additional information about Saudi Aramco or Sumitomo
Chemical can be found on the following websites:www.saudiaramco.com
www.sumitomo-chem.co.jp/english/