Bid & Tender
PetroRabigh Delays Phase 2 Expansion

Date : Oct 04, 2016

Saudi Arabian petrochemical company PetroRabigh said on Thursday it would again delay completion of an expansion project, raising the cost of the project to SR34 billion ($9.1 billion).


Completion will be postponed by at least six months to the second quarter of next year because of "construction market challenges", said PetroRabigh, a joint venture between national oil giant Saudi Aramco and Sumitomo Chemical.


It did not elaborate, but the Saudi construction industry has been hit hard in the past year by delays in government payments due to low oil prices. This has strained builders' finances and made it hard for them to pay suppliers and employees.


Under PetroRabigh's Phase Two expansion, an existing ethane cracker will be expanded and a new aromatics complex will be built to process more than 2.7 million tonnes of naphtha a year into higher-value petrochemical products.


The expanded facility was originally expected to start production in the first half of 2016. But last December, PetroRabigh said it would delay completion by nine months due to "the failure of the key contractors of the project to meet the planned implementation schedule", raising the estimated project cost by SR1 billion ($366.4 billion) to SR31 billion ($8.2 billion).