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Riyadh: Saudi Arabian Mining (Maaden) said yesterday that a phosphate venture it is developing with Saudi Basic Industries Corp (Sabic) will cost 21 billion riyals ($5.6 billion), 62 per cent more than expected in March.
"The increase in the cost of the project ... is due to a rise in prices in the international construction market," state-owned Maaden said.
Sabic, the world's largest chemical company by market value and the Gulf's largest steel producer, owns 30 per cent of the project and Maaden the rest. They said in March the project would cost 13 billion riyals.
Energy projects in the Gulf Arab region face delays and cancellations due to a shortage of engineers and labourers, Anne Keller of Jacobs Consultancy told an energy conference in March.
Spiralling costs
Qatar Petroleum and ExxonMobil in February dropped plans to build a gas-to-liquids plant in Qatar due to spiralling costs, initially put at $7 billion in 2004.
The phosphate project is Sabic's first in mining and its fourth in fertilisers.
The project involves mining for phosphates and building a processing plant producing three million tonnes per year of di-ammonium phosphate fertiliser, the two companies said.
With the project, Sabic, the main shareholder in Saudi Fertilisers, would be able to increase its fertiliser production by 900,000 tonnes per year to eight million tonnes, chief executive officer Mohammad Al Madi had said in March this year.
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