Aramco, Sabic tie up to build US$20b complex

DHAHRAN (Saudi Arabia): State oil giant Saudi Arabian Co (Aramco) and petrochemical producer Saudi Basic Industries Corp (Sabic) signed a memorandum of understanding yesterday to build a US$20 billion (RM82.4 billion) complex converting crude oil to chemicals in the kingdom.

The project, which the partners said would be the largest crude-to-chemicals facility in the world, is a sign that the Saudi government plans to spend heavily on diversifying the economy beyond crude oil exports.

Private sector investment has slowed in the last few years because of low oil prices and government austerity policies, so Riyadh aims to invest billions of dollars on developing valueadded manufacturing industries such as chemicals, as well as service industries like tourism.

Aramco chief executive Amin Nasser said a final decision on whether to go ahead with the crude-to-chemicals project would be made by the end of 2019.

His company was tentatively looking at the Red Sea port city of Yanbu, already an industrial centre, as the location for the project, he added.

The complex would start operations in 2025, processing about 400,000 barrels a day of Arabian Light crude oil to produce nine million tonnes of chemicals and base oils annually, plus 200,000bpd of diesel for domestic consumption.

Sabic’s chief executive Yousef al-Benyan said the project was the first time that Saudi Arabia’s two biggest companies were cooperating on a joint industrial project using new technology. Investment costs would be shared equally.

The new complex would create 30,000 jobs and add 1.5 per cent to Saudi Arabia’s gross domestic product by 2030.