Sabic to weigh up methanol plant deal
Saudi Basic Industries Corporation (Sabic) signed a preliminary agreement with the state-controlled Russian Direct Investment Fund and ESN Group of Moscow for a potential investment in a methanol plant in Russia’s Far East.
This comes as the Middle East’s biggest petrochemicals producer plans to expand its international presence.
The agreement, part of a broad range of deals signed during the visit of Russian President Vladimir Putin to Saudi Arabia on Monday, will explore the option to build and operate a methanol plant with a capacity of a 2 million tonnes per year in Russia’s Amur region.
The agreement is in line with the company’s efforts to “diversify its operations, seek new investment opportunities and strengthen its position in the global market”, Sabic said in a statement to Saudi Arabia’s Tadawul exchange, where its shares trade.
Saudi Aramco, the world’s biggest oil-producing company,
The agreement is part of a range of deals signed during the visit of Vladimir Putin to Saudi Arabia
took a 70 per cent stake in Sabic, the kingdom’s largest-listed company, earlier this year.
The petchems operator has sought to significantly increase methanol in its portfolio this year. In January, Sabic signed a preliminary agreement with South Louisiana Methanol to explore the possibility of developing a chemicals plant in the US to profit from surging North American shale gas production.
It also increased its stake in Arrazi Methanol Company after purchasing Japan Saudi Arabia Methanol Company’s 50 per cent interest for $150 million (Dh551m) in December.
Investment in the downstream segment of the energy value chain has become a priority for Middle East oil producers, as they hope to earn revenue from the sale of higher value products.
Russian companies are also exploring investments in the kingdom’s lucrative downstream sector.
Russia’s Sibur Holding is considering $1 billion worth of investments in the Saudi petchems sector, Mr Putin said before his visit to Riyadh.
Aramco on Monday signed nine preliminary agreements with Russian entities, including a deal with Gazprom Neft to exchange technical knowledge and identify “mutual technical studies of interest to both companies”, according to a statement by the state company.