Saudi Aramco and Dow Chemical have revived their plans for a US$22 billion (Dh80.74bn) joint venture to expand a Saudi oil refinery and build a petrochemicals complex. According to a local news report, the partners issued a request for bids last week, and are seeking companies interested in building the first phase of the project, which would be the largest of its kind in the world. Aramco, the Saudi national petroleum company, said in April that it was deferring plans to increase the processing capacity of its Ras Tanura refinery by 400,000 barrels per day (bpd) at a cost of $8bn, as it waited for construction costs to fall.
Earlier this month, it said the petrochemicals plant would start operations in 2015, two years behind schedule. The initial cost estimate for the petrochemicals project alone was $20bn, so Aramco and Dow, the US chemicals producer, may have saved about $6bn by waiting to award contracts for the integrated venture. The Ras Tanura refinery expansion is one of five developments proposed to raise Saudi Arabia's refining capacity by about 80 per cent to 3.8 million bpd from 2.1 million bpd. The project would help meet the kingdom's rising domestic demand for petroleum products such as petrol, diesel and fuel oil, as well as supplying feedstock to the planned petrochemicals complex.