Saudi Aramco has launched a project to build a new 400,000 barrel per day refinery that will cost $7 billion to $8 billion, the Middle East Economic Digest (MEED) reported.

The new plant is scheduled to come onstream in early 2012, MEED said without giving the source of the report. It will be built on the kingdom's east coast at Ras Tanura, already the site of the Middle East's largest refinery complex.

The refinery is the fourth new domestic plant that the world's largest oil exporter is planning to build. The four plants combined would boost Saudi Arabia's refining capacity by as much as 1.6 million bpd to 3.8 million bpd.

The plant will process Arab Heavy crude, which refiners find more costly to process than lighter oil. Planned additions to Saudi Arabia's crude output will increase the share of its oil which is heavy.

The plant's design will be aimed at maximizing output of middle distillates, such as diesel and kerosene.

The refinery will have a 231,000 bpd vacuum unit, a 91,000 bpd diesel hydrotreating unit, a 123,000 bpd visbreaker and a 55,000 bpd catalytic cracker.

Aramco has prequalified international consultants for the project management and asked for expressions of interest to be submitted by June 25.

Ras Tanura already has a capacity of 550,000 bpd, and the new plant would make it one of the world's largest refinery complexes.

It will also be the site of one of the world's largest petrochemical plants to be built from scratch. Aramco and US Dow Chemical in May announced a deal to build a petrochemical plant that industry insiders expect to be the largest foreign investment in the kingdom's energy sector with a cost of over $20 billion.

Saudi Aramco has signed two joint ventures with France's Total and ConocoPhillips for export refineries with a capacity of 400,000 bpd each to cope with a growing crude output capacity.

Total's refinery in Jubail will cost $6.4 billion and the Yanbu refinery with ConocoPhillips will cost $6 billion.

The deals were part of plans by Aramco to spend with partners $50 billion by end-2011 to boost refining capacity at home and abroad.

Aramco has yet to find a partner for another refinery, which will have capacity of 250,000 to 400,000 bpd and will be located in the western Jizan province. Reuters