JEDDAH, 8 June 2006 -- Custodian of the Two Holy Mosques King Abdullah will launch a number of petrochemical and infrastructure projects at the new Jubail Industrial City (Jubail-II) on Sunday.

The king will commission the Butanediol plant of the Saudi International Petrochemical Company (Sipchem). The plant, the first of its kind in the Middle East, has an annual capacity of 75,000 tons to meet world and domestic market demands.

Abdullah will also dedicate a number of new projects belonging to the Royal Commission for Jubail and Yanbu as well as private companies, according to Prince Saud ibn Abdullah ibn Thunayan, chairman of the commission.

"The king will lay the foundation for a number of Royal Commission projects in Jubail," Prince Saud said, describing the Jubail Industrial City as the largest engineering project in the world.

The RC chief said the projects to be launched by the king would also include new facilities of King Fahd Industrial Port and infrastructure projects of Jubail-II. He said the king's visit would boost economic and industrial development of the region and the welfare of its people.

The royal visit will also include Al-Ahsa. Preparations have been stepped up in the Eastern Province to welcome the king, who will be given a big reception in Alkhobar.

Abdullah opened Jubail-II in December 2004 when he was crown prince. Jubail-II is expected to attract investment projects worth SR220 billion and create some 55,000 job opportunities. Prince Saud said Jubail-II would provide an expansion facility for the industrialization of the city for the next 25 to 30 years.

Jubail, a burgeoning industrial hub on the Arabian Gulf, has been named the city with the best economic potential in the Middle East by the prestigious business publication Financial Times' Foreign Direct Investment (fDi) magazine. Jubail received the accolade after its detailed economic information was assessed by a panel of expert judges who selected the city over 40 other economic centers in the Middle East. The city has enjoyed massive foreign investments of over SR172 billion ($46 billion). It is expected to rise even further on the map of global commerce and industry in the areas of energy and transportation. Of all foreign investments flowing into Saudi Arabia, nearly half have gone to Jubail.

Many new petrochemical, oil and infrastructure projects are coming up in Jubail, involving billions of riyals in investment. Sipchem recently signed a SR4 billion contract with a consortium of Canadian, German and French firms for the construction of acetic acid and vinyl acetate plants in Jubail. It will have an annual production capacity of 460,000 tons.

Last month, Saudi Aramco signed a landmark accord with France's Total to build a world-class oil refinery in the city at an estimated cost of nearly SR22.5 billion ($6 billion.) The project is scheduled to begin operating in 2011.

A giant dual-purpose Independent Water and Power Plant (IWPP) will also be established in Jubail at a cost of SR11 billion. Marafiq (the Power and Water Utility Company for Jubail and Yanbu) has received offers from major national and international companies to carry out the project. The new IWPP, to be established in Jubail Industrial City by 2009, will supply 2,700MW electricity and 800,000 cubic meters of desalinated water daily. The Saudi Basic Industries Corp. (SABIC) announced recently that it had signed an agreement to establish a SR12 billion ($3.2 billion) petrochemical company in Jubail. SABIC will have a 35 percent stake in the new firm, Saudi Kayan Petrochemicals Company, while SABIC's partner Kayan Petrochemicals will own 20 percent and the remaining 45 percent will be put in an initial public offering (IPO) which is expected to be launched within two months.

By P.K. Abdul Ghafour

© Arab News 2006