The new storage facilities will include 240,000 cubic metres for dirty products - heavy oil and crude petroleum - and 100,000 cubic metres for clean products - refined products, petrochemicals and edible oil. Construction will begin by the end of the first quarter of next year and is expected to take 18-22 months. The selection of a contractor is expected by the end of October.

AT has just 15,000 cubic metres of existing storage capacity at Yanbu as well as some port facilities, which will also be upgraded to accommodate the extra capacity. The company is a joint venture between Saudi Arabian Refining Company (Sarco)and MQA, both local, Kuwait's Independent Petroleum Groupand Petroplusof the Netherlands.

Demand for storage is rising in the kingdom as the economy improves and major gas projects develop. A new pipeline is expected to increase petrochemicals production capacity at Yanbu industrial city and initial proposals for the Saudi gas initiative indicate that at least one new worldscale ethane cracker will be built there.

The Saudi Company of Chemical Trading (Chemtrade)is also planning to expand storage capacity. Chemtrade has 13,000 cubic metres at Yanbu, and is conducting a feasibility study on the doubling of its capacity by 2002. The company specialises in bulk export facilities, which it uses for shipping chemicals to other countries in the region, notably Qatar, Bahrain and Yemen. It uses 60 per cent of its storage facilities for bulk shipments and leases the remaining 40 per cent to other companies.