RIYADH, 11 May 2006 — In a major move to boost the industrialization process of the Kingdom, the National Industrialization Company (Tasnee) signed a joint venture deal with Basell Polyolefins to formally launch an SR10 billion company. The project, the first of its kind launched by Tasnee in collaboration with a foreign partner to produce ethylene and polyethylene, will provide job opportunities to over 6,000 Saudi nationals.

Addressing a press conference after the signing ceremony here yesterday, Mubarak Al-Khafrah, Tasnee’s chairman, said that Tasnee, Sahara Olefins Company and Basell had now established the Saudi Ethylene and Polyethylene Company (SEPC) with the joint-venture deal. Prince Abdul Aziz ibn Salman, deputy minister of petroleum and mineral resources and Moayyed ibn Issa Al-Qurtas, NIC’s chief executive, also attended the luncheon ceremony.

On behalf of Tasnee, Al-Khafra signed the JV agreement, while Volker Trautz, CEO and president, inked the deal representing Basell. Two contracts for the execution of the project — one with the Germany-based Linde AG and another with the Italian-based Maire Tecnimont — were also signed by Al-Khafra at the same venue. Fabrizio Di Amato and Werner Schwarzmeier inked the deals representing Tecnimont and Linde respectively.

The consortium of Linde/Samsung is the contractor for the ethylene plant, while Tecnimont is the contractor for the polyethylene plants. Several diplomats and businessmen also attended the signing ceremony.

Referring to the capacity of the SEPC, Al-Khafra said that the project would produce about one million tons of ethylene, 285,000 tons of propylene, 400,000 tons of high-density polyethylene and 400,000 tons of low-density polyethylene.

The project, which is owned by Tasnee and Sahara Olefins Co. with 75 percent shares, and their foreign partner Basell (25 percent), would be operational in the second half of 2008 in the eastern Saudi industrial city of Jubail. This comes after the formation of Tasnee and Sahara Olefins Co. (a closed joint stock company) with a paid up capital of SR2.4 billion in partnership with the National Petrochemical Industrialization Company, an NIC affiliate; which owns 60.45 percent of the paid-in capital (SR1.451bilion) in the project.

Sahara Petrochemicals Co. owns 32.55 percent (SR781 million) and General Organization for Social Insurance (GOSI), seven percent (SR168 million). About 30 percent of the total cost of SR10 billion of the project will come proportionately from the partners.

The Saudi Industrial Development Fund (SIDF) has also been approached for SR1.2 billion, while the remaining amount will be raised from Public Investment Fund and commercial banks of the Kingdom.

The NIC officials said that the SEPC products would be marketed by Basell in the US, Europe and Asia, while Tasnee would promote the products in the Kingdom, the Gulf Cooperation Council states, the Middle East and some Asian countries. Speaking on this occasion, Basell chief Trautz said that “Basell, the largest producer of polypropylene in the world and one of the largest producers of polyethylene besides being the global leader in terms of technology in this sector.”

This company, Basell chief said, was formed as a joint venture between Shell and BASF. Basell, which is presently owned by Access Industries of the US, has its production facilities in 26 countries and its business presence in 120 countries around the globe. The National Petrochemical Industrialization Company has been founded by Tasnee of Saudi Arabia to develop and operate petrochemical projects. Sahara Petrochemical Co. is a Saudi joint-stock company.