May 22 2006 |
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Saudi Arabia: $6 Billion Deal Signed
Saudi Aramco, Total To Set Up Export Refinery In JubailJubail Export Refinery the proposed refinery is estimated to cost US$6 billion. It will be producing high quality refined products for the world market. 75 percent of the production will be refined products and the rest will be feedstocks for the Kingdom's petrochemical industry.
As agreed, Saudi Aramco and Total will form a joint venture company, with either companies holding ownership interest of 35% each, or a total of 70%. The remaining 30% interest in the company will be offered for public subscription.
"The Jubail Export Refinery, with its ability to process large quantity of heavy crude, not only eases tight refining capacities but also addresses the mismatch between available crude supplies and refinery configurations that is complicating today's market situation," Jum'ah said after the signing ceremonies.
Desmarest said Jubail Export Refinery, which incorporates huge conversion capacity from heavy oil to refined products, will substantially contribute to the world refining capacity. "We are proud and delighted to be the partner in this joint venture," he said.
Total is one of the world's major oil and gas companies with activities that span more than 130 countries. It is one of the companies that joined the pool of international oil firms in 2004 that explored and developed new non-associated gas reserves in Rub' Al-Khali in the so called Empty Quarter.
Isam Al-Bayat, Saudi Aramco vice president for new business development addressing also the signing ceremonies, said that investing in refining like the Jubail Export Refinery is economically attractive and will add value to shareholders.
"We believe that an in Kingdom refinery will enjoy competitive advantage through a secure source of crude oil well established infrastructure and a strategically located location to access multiple markets," he said.
By Joe Avancena
© The Saudi Gazette 2006
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