Sumitomo Chemical Co. and Saudi Arabian Oil Co. announced Sunday they have agreed to form an equally owned company to build a major integrated refining and petrochemical complex in the Saudi Red Sea town of Rabigh at an estimated cost of $4.3 billion.
The plant, to be operational in late 2008, will be one of the largest in the world, with a capacity to produce 1.3 million tons of ethylene and 900,000 tons of propylene a year, as well as 80,000 barrels of gasoline a day, the two companies said in a statement.
It is the first time a Japanese chemical company has move to establish a jointly owned company of such scale for oil refining.
The project will also include a plant to produce chemical products using natural gas, the first such facility to be built by a Japanese company.