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THE DOWNSTREAM CHALLENGEHawiyah Gas Plant will be expanded by 50 percent toprocess more non-associated gas. The gas-processingcapacity will rise from 1.6 billion to 2.4 billion scfd. Thisproject constitutes the final phase of the Hawiyah NGLRecovery program and is scheduled to be completed inJuly 2008.As part of the project to increase Shaybah’s crude oilproduction capacity, the Shaybah Gas CompressionUpgrade Project was commissioned in early 2006 tohandle the increasing Gas Oil Ratio (GOR) associatedwith the crude to eliminate gas flaring while maintainingmaximum crude production. The project added a capacityof 200 million scfd of gas compression to the facility.We are charting new territory for ourselves and ourindustry in the region through our strategy to transformour conventional refineries into petrochemicalmanufacturing centers to serve as hubs for newindustrial clusters. This strategy will contribute to SaudiArabia’s continued industrialization and job creation.These industrial clusters will use the refineries’petrochemical feedstocks to manufacture plastics,high-performance materials, and other value-addedgoods and products for export.Saudi Aramco’s first foray into this area is our jointventure with Sumitomo Chemical Co. of Japan to developour Rabigh Refinery into an integrated refining andpetrochemical complex.Ground was broken on the PetroRabigh project inMarch, and construction is under way. In October, oneof the heaviest lift ships in the world delivered two 1,000-ton polyethylene reactor columns, which were unloadedonto special multi-wheeled trailers for delivery to thesite. Once completed in 2008, the PetroRabigh facilitywill produce about 2.5 million tons of petrochemicalderivatives annually, in addition to high quality fuels.We are currently negotiating with Dow ChemicalCompany as a potential partner in a joint venture toconstruct, own and operate a world-scale chemicalsand plastics production complex integrated withour Ras Tanura Refinery. When fully operational, thenew petrochemical complex will be one of the largestplastics and chemicals production facilities in the world,well-situated to access most major world markets.The proposed petrochemical complex will produce anextensive and diversified slate of chemicals, operateprofitably and introduce new value chains and specialtyproducts to the Kingdom. This, in turn, will help spurdevelopment of downstream conversion industries,further diversifying the domestic economy and generatingjob opportunities for Saudis. The anticipated projectstart-up date is 2012.Direct investment in the Kingdom’s petrochemical industryduring the next five years is expected to be significant.These investments target not just the production of basiccommodity products, but also specialty and downstreamproducts that are more labor intensive.THE HAWIYAH NGL RECOVERY PLANT WILL RECOVER ETHANE ANDPROPANE FROM SALES GAS TO INCREASE THE KINGDOM’S SUPPLYOF PETROCHEMICAL FEEDSTOCK.This latest chapter in Saudi Aramco’s transformationfrom a production powerhouse to a fully integrated,international energy enterprise is further evidence of theKingdom’s efforts to leverage its resources to strengthenand diversify its economy.34 SAUDI ARAMCO