Aramco's Rabigh plant will become one of the world's biggest

A recent upsurge of terrorism in the kingdom has worried foreign firms, and the US has told its citizens to leave.

But Saudi Arabia said the Japanese deal could bring in investment of $4.3bn to a plant at Rabigh on the Red Sea cost.

The site is not far from Yanbu, where five engineers were gunned down at a chemical plant a week ago.

"While we would have to deal with various unforeseen challenges which may lie ahead of us, I am convinced that this joint project is bound to succeed," said Hiromasa Yonekura, president of Sumitomo Chemicals.

Safe to invest?

The scheme, due for completion in 2008, will turn the Rabigh refinery into one of the world's biggest petrochemical facilities.

Abdallah Jumah, president and chief executive of state energy producer Saudi Aramco, said security for the industry was now tight.

Facilities are protected by 5,000 guards as well as physical barriers, cameras and government security forces, Mr Jumah said.

"We cannot take one incident and say the situation pertains across the whole of the kingdom," he said.