Saudi Aramco, the world's top oil exporter, said on Monday its Khursaniyah project was on track to start production in December.

The Khursaniyah project will pump 500,000 barrels per day of light crude which is more than double the next largest Opec capacity boost due in 2007.

'The start of the project for the production of new crude oil in Khursaniyah is expected in December 2007,' Aramco said in a statement.

The firm said last year that the project would be completed in June 2007.

In addition to the Arabian Light crude, the development is designed to have production and processing capacity of 300 million standard cubic feet per day of associated gas online in December, a company spokesman said earlier this month.

Saudi Arabia accelerated its oilfield expansion plans to maintain spare capacity of between 1.5 million to two million bpd to meet growing demand or cover unexpected shortfalls in global supply. It cut preliminary work at Khursaniyah to eight months from 20 months as part of that plan.

Additional increments are scheduled to take the Opec producer's output capacity to 12.5 million bpd by 2009.

The company's maximum production capacity is at 10.8 million barrel per day, Aramco said in the statement.

'The optimal level in the production of crude oil was achieved to satisfy demand,' it said. The kingdom's current output is around 8.57 million bpd.

Aramco also expects the PetroRabigh refining and petrochemicals joint venture project with Japan's Sumitomo Chemical to start operations by the end of 2008, it added. The project is expected to cost $10 billion.

PetroRabigh will increase gasoline-making capacity at the 400,000-bpd Rabigh refinery by 60,000 bpd alongside an ethane-fed petrochemical cracker with 1.3 million tonnes a year of ethylene capacity. -Reuters