JEDDAH, 31 May 2005 — Saudi Basic Industries Corporation (SABIC) yesterday signed a Letter of Intent (LOI) with the US Flour Company to construct utilities and site facilities at the SABIC affiliate, Yanbu National Petrochemicals Company (YANSAB) in Yanbu.

According to a report received yesterday, the LOI was signed in the presence of SABIC Vice Chairman & CEO Mohamed Al-Mady by Abdul Rahman Al-Fakeeh, president YANSAB, for SABIC, and David Seaton, senior vice president, chemical products business line, energy and chemicals group, for the Flour Company.

Al-Mady said, “The utilities and site facilities are the largest units of the YANSAB complex and are vital for feeding the various complex plants with water, power supplies, steam and chilled water.

“I expect that these works will be completed within 34 months. Completion of the complex mechanical works is expected during the first quarter of 2008. Initial annual production capacity will go beyond 4 million MTY of petrochemical products which will strengthen SABIC’s contribution to national development plans and boost its competitive capabilities in the global markets.

“YANSAB will apply the latest state-of-the-art and cutting-edge technologies in its production operations including Scientific Design Ethylene Glycol technology, 50 percent owned by SABIC and 50 percent by German Sud Chemi. It will also use Butene-1 technology developed by SABIC in cooperation with the French Petrol Institute. In addition, the complex will apply for first time a new technology for the manufacture of HDPE and other technologies for conversion of pure aromatic compounds into Benzene.

“Once operational, this mega project will employ 1,500 employees, benefiting Saudi citizens.”

YANSAB will be one of the world’s largest plants. It will produce 1.3 million MTY of Ethylene; 400,000 MTY of Propylene; 900,000 MTY of High Density Polyethylene (HDPE) and Low Density Polyethylene (LLDPE); 400,000 MTY of Polypropylene (PP); 700,000 MTY of Mono Ethylene Glycol (MEG); 250,000 MTY of Benzene, xylene and toluene compound. The complex will manufacture a wide range of basic chemical, intermediate and polymer products.

SABIC has recently selected the ABN Amro Group with Saudi Hollandi Bank as the financial adviser for the YANSAB project.

SABIC’s concern for the well being of its employees is also evident in the excellent safety record of its affiliates. This concern for health and safety also extends to the global environment and SABIC continuously monitors the ecological impact of its operations.

SABIC affiliate Eastern Petrochemical Company (SHARQ) received on May 20, the International Safety Award for the year 2004 from the British Safety Council. SHARQ has won this prestigious safety award for its distinct efforts and for achieving highest performance rates in the field of industrial and environmental safety. Al-Mady congratulated SHARQ President Mohammed Al-Jabri, and all SHARQ employees for this outstanding accomplishment.

British Prime Minister, Tony Blair, sent a message to the winners, “At its best, sensible health and safety should be about managing risk, rather than trying to eliminate them altogether. Managing risks has a benefit not just to employees, but also to the economy as a whole, helping to tackle the 39 million days lost each year to ill health and injuries.”

David Ballard, director general of the British Council, said, “The international safety awards highlight organizations that demonstrate commitment to health and safety. They are a mark of a proven and significant achievement in safety standards. By making safety an important feature of everyday work practice, Eastern Petrochemical Company (SHARQ) is reducing accidents and ill health while improving productivity and profitability.”