The MoU sets out the key parameters on the project, its configuration and a broad range of major technical, commercial and financial terms. It also provides for a 50:50 joint venture to be established between the two companies to implement the project, Aramco said.

The next step in the project's implementation will be for the two companies to carry out a detailed feasibility study, which will take at least 12 months and confirm the project's capital and operating costs. In parallel with the feasibility study, the companies will negotiate the key project agreements.

Under the initial plans, the Aramco/Sumitomo team plans to build a high olefins-yield fluid catalytic cracker on the site, to be integrated with an ethane cracker producing 1.3 million tonnes a year (t/y) of ethylene.

The complex will also include a range of ethylene-based units. Two linear low-density polyethylene (LLDPE) lines with total capacity of 900,000 t/y are planned, one of which will use Sumitomo's proprietary Easy Processing Polyethylene technology. In addition, two 700,000-t/y polypropylene (PP) lines and a PP compounding unit, whose capacity will be determined during the feasibility study, will be built.

The study will also determine the capacity of a third facility planned to use Sumitomo's in-house oxidation technology for the production of propylene oxide and other propylene derivatives. The final element of the study will look at setting up ethylene conversion units for products such as mono-ethylene glycol (MEG) and alpha olefins. On the refinery side, 80,000 barrels a day (b/d) of new capacity is planned.

Aramco will provide the feedstock for the complex - 400,000 b/d of crude oil, 95 million cubic feet a day of ethane and up to 15,000 b/d of butane. Aramco says the existing project site and infrastructure will 'serve as the base platform for the development' of the new complex.

Aramco has still to award the contract to carry out project management consultancy (PMC) services on the scheme. The company is understood to have held meetings in recent weeks with five companies - Bechtel, Fluor Daniel, Foster Wheeler, Halliburton KBRand ABB LummusGlobal, all US-based - seeking prequalification for the contract, which will include front-end engineering and design (FEED - MEED 9:4:04).

The existing 325,000-b/d hydroskimming export refinery was completed in 1985 as a joint venture between Saudi Arabia's General Petroleum & Minerals Organisation (Petromin)and the Greek company Petrola Hellas. The facility came on stream in 1990. In 1995, Aramco assumed full ownership of Rabigh by buying out Petrola's 50 per cent share.