Nicosia, June 3 : Despite earlier rumours that escalating costs may lead the cancellation of the project, major oil producer Saudi Aramco and the US-based integrated oil company ConocoPhilips have announced that they are moving ahead with the plan to develop a 400,000 barrels per day refinery in the industrial city of Yanbu, Saudi Arabia.

The two companies plan to form a joint-venture company, with equal interests to own and operate the proposed new refinery.

When the full conversion refinery project was announced two years ago, the cost of the project was estimated at six billion dollars. The new estimates are that it will cost between 14 billion dollars and 15 billion dollars.

The next phase of the project will include solicitation of bids and site preparation work.

The refinery is designed to process 400,000 bpd Arabian heavy crude to be supplied by Saudi Aramco and produce high-quality, ultra-low-sulfur refined products that meet current and future US and European product specifications.

A joint statement said that the initial evaluation and front-end engineering and design were complete. (ANI)