JEDDAH, 2 June 2004 — Saudi Chevron Phillips (SCP) is expected to sign a major deal with its US counterpart Chevron Phillips Chemicals (CPChem) within a couple of days to establish new plants in Jubail at a total cost of SR4.1 billion to produce styrene and polypropylene, Al-Riyadh Arabic daily said. The new plant will start experimental operation in early 2007, it added.

The Public Investment Fund and Saudi Industrial Development Fund are to finance the new project, one of the largest Saudi-US ventures in the Kingdom. A number of banks have already sanctioned loans worth more than $460 million.

SCP, which was established in 1997 with a paid-up capital of SR610 million, has already signed a partnership accord, a marketing agreement and technical support accord for the new project. An international company has agreed to market 40 percent of its styrene output for 10 years.

Three international firms are vying to win the contract to implement the project and the winner would be announced by the end of this year, the paper said.

SCP has increased its capital to SR1.2 billion to finance new projects, Al-Riyadh said. The additional fund came from the existing shareholders and the Pensions Fund.

The company has plans to establish a third petrochemical plant at a cost of SR9 billion, the paper said.

Once the feasibility study is completed, the project would be presented to shareholders. SCP is equally owned by the Saudi Industrial Investment Group and CPChem.

SCP’s first petrochemical plant in Jubail is a grass-roots facility designed to produce 480,000 metric tons per annum of benzene, 220,000 MTA of cyclohexane, and 372,000 MTA of gasoline blendstock from a naphtha-based feedstock.

SCP’s plant in Jubail, which started up in 2000, uses CPChem’s proprietary Aromax technology to manufacture benzene and hydrogen, both of which are used in the manufacture of cyclohexane.

The company expanded its cyclohexane capacity in Jubail by 20 million gallons to 95 million gallons last year to supply its existing customer base.

“This plant is one of the lowest-cost cyclohexane and on-purpose benzene producers in the world,” said Don Lycette, president of SCP.

“We have a demonstrated record of safe and efficient operation in Saudi Arabia, and a world-class logistics system that ensures we are a reliable supplier.”

CPChem, along with its affiliates, is the world’s largest producer and marketer of cyclohexane.