State oil giant Saudi Aramco and Japan's Sumitomo Chemical are close to signing multi-billion-dollar contracts to expand their petrochemical complex in Saudi Arabia, industry sources said.

Aramco and Sumitomo have taken longer than expected to pick contractors for the Rabigh II petrochemical expansion project, which is expected to cost around $7 billion, but three sources in Saudi Arabia said they now expect the deals to be signed next week after some contractors lowered their bids for the work.

The successful bidders include Britain's Petrofac, South Korea's GS Engineering and Construction, Italy's Saipem and Japan's JGC, sources said.

Under Rabigh II, an existing ethane cracker will be expanded and a new aromatics complex will be built using around 3 million tonnes per year of naphtha to make higher-value petrochemical products.

JGC is to expand the existing ethane cracker at the complex located at Rabigh on the Red Sea coast of Saudi Arabia.

Sumitomo, Petrofac, Saipem, and JGC declined to comment, while Aramco was unavailable for comment. – Reuters