Saudi Aramco and French integrated oil major Total have signed the shareholders agreement and other core agreements for the establishment of their joint venture, the Jubail Refining and Petrochemical Company.
The 400,000 barrel-per-day Jubail refinery will process Arabian heavy crude to high–quality refined products that will meet the most stringent global product specifications and is expected to begin operations at the end of 2012.
As a full-conversion unit, the refinery is expected to maximize the production of diesel and jet fuels. In addition, the project will produce 700,000 tons per year (tpy) of paraxylene, 140,000tpy of benzene and 200,000tpy of polymer-grade propylene.
The refinery will benefit from its proximity to the Arabian heavy crude supply system and from the facilities of the Jubail Industrial City, including power and water grids.
Following the signing of the agreements, the Jubail Refining and Petrochemical Company will be formed during the third quarter of 2008. Saudi Aramco will initially own 62.5% of the company and Total will own the remaining 37.5%.
Subject to required regulatory approvals, the two parties are planning to offer 25% of the company to the Saudi public. The two founding shareholders each intend to retain a 37.5% ownership interest. Saudi Aramco and Total will share the marketing of the refinery’s products.