Eric Watkins
Senior Correspondent
LOS ANGELES, May 16 -- Saudi Aramco and ConocoPhillips have approved continued funding for the development of the Yanbu export refinery project.
The companies plan to construct a grassroots, 400,000 b/d full-conversion refinery in Yanbu Industrial City, on Saudi Arabia's Red Sea coast.
The refinery is designed to process Arabian heavy crude to be supplied by Aramco, and will produce high-quality, ultralow-sulfur products. It is targeted to start up in 2013.
Aramco and ConocoPhillips each would be responsible for marketing one half of the refinery's production.
The companies have completed the initial evaluation and front-end engineering and design outlined in their May 2006 memorandum of understanding. The next phase will include solicitation of construction bids, commitment of long lead items, and site preparation work.
The two firms plan to form a joint-venture company, with 50-50 stakes in owning and operating the refinery. Subject to required regulatory approvals, however, the companies plan to offer an interest in the refinery to the Saudi public.
Contact Eric Watkins at [email protected].
