New chemicals complex for Saudi Arabia


Saudi Arabia’s national oil company, Saudi Aramco, has announced it is to form a joint venture to build and operate a chemicals complex in Jubail Industrial City, Saudi Arabia.

The joint venture, Sadara Chemical Company, will be formed with the Dow Chemical Company of Michigan in the US to build what the companies have called a “world-scale, fully integrated chemicals complex”.

The announcement follows an extensive project feasibility study and a front-end engineering and design effort which began in 2007. The site for the project is located in the Eastern Province of Saudi Arabia, approximately 100 kilometres north-west of Dammam.

The complex, which will consist of 26 manufacturing units, will be one of the world’s largest integrated chemical facilities, and the largest ever built in one single phase. The complex will have flexible cracking capabilities and will produce over three million metric tons of high value-added chemical products and performance plastics.

The complex will primarily serve the energy, transportation, infrastructure and consumer products markets.

Construction will begin immediately, with the first production units due to come on line in the second half of 2015. All units are expected to be operational in 2016.

Total investment for the project, including third party investment, will be approximately $20 billion.

Sadara anticipates that annual revenues of approximately $10 billion will be achieved within a few years of operation, with thousands of direct and indirect jobs expected to be generated by the project.

Khalid Al-Falih, president and CEO of Saudi Aramco, said: “This project represents a key milestone in Saudi Aramco’s ambitious downstream growth strategy. We are pleased to have Dow as our partner, as they bring a fantastic record of success in the chemicals business and a top tier brand to the project. Dow also brings a superior mix of downstream product technologies, and world-class operational and marketing capabilities to the Sadara joint venture. These will complement the strengths of Saudi Aramco as the world’s largest integrated and most reliable supplier of energy and petroleum-based derivative products.”

Andrew N. Liveris, Dow’s chairman and chief executive officer, commented: “Today’s announcement is outstanding proof of Dow’s ongoing commitment to our growth strategy. This premier partnership is the right economic ownership model with the right partner. It is designed to capture growth in the rapidly growing sectors of energy, transportation and infrastructure, and consumer products by creating a manufacturing hub that will provide a differentiated product slate and an advantaged cost position.”

He added: “We are bringing the best of Dow’s technology-differentiated and globally leading products to Sadara. Customers in emerging geographies such as China, the Middle East, Eastern Europe and Africa will benefit from a strong supplier with feedstock integration, in-market commercial and supply capabilities, advanced technologies and resources to grow with their demand.”