Aramco to sign chemicals project deal with SABIC

Aramco to sign chemicals project deal with SABIC
Updated 10 May 2016

Aramco to sign chemicals project deal with SABIC

Aramco to sign chemicals project deal with SABIC

DHAHRAN: Saudi Aramco expects soon to sign a memorandum of understanding with Saudi Basic Industries Corp. for a joint oil-to-chemicals project, CEO Amin Nasser said.

SABIC has previously said the proposed project could cost as much as $30 billion, processing petrochemicals directly from crude oil instead of first refining the oil into products such as naphtha.
“It makes absolute sense as Aramco is specialized in oil and refining, and SABIC in petrochemicals,î said one industry source familiar with the project, adding that the scheme could create as many as 100,000 jobs directly and indirectly.
Aramco’s participation could benefit SABIC by giving it better access to funding as well as assistance in marketing products, said Mazen Al-Sudairi, head of research at Al-Istithmar Capital.
“The change in feedstock prices prompted SABIC to change strategy — they want to produce specialty products — and with Aramco possibly joining them as an investor, it will open a big door for them,” he said.
Also Tuesday, CEO Amin Al-Nasser said Saudi Aramco will keep expanding despite low crude prices, its president said on Tuesday.
“Saudi Aramco will continue to expand,” Al-Nasser said during a tour of the company’s headquarters on Saudi Arabia’s Gulf coast in Dhahran, where it drilled its first test well in 1935.
Even though the current situation “is challenging, it is an excellent opportunity for growth,” said Nasser, as the industry worldwide reels from the collapse in oil prices.
Globally, Saudi Aramco is seeking new joint ventures abroad, said the CEO, naming Indonesia, Vietnam, India and China.
Asked to elaborate, he said: “Right now we’re looking at refining, integrated petrochemicals.”
Aramco has meanwhile begun work on a “world class” maritime complex which would conservatively create 80,000 direct and indirect jobs and have a $17-billion impact on gross domestic product.
The complex in Ras Al-Khair would provide engineering, manufacturing and repair services for offshore rigs, commercial vessels and offshore service vessels.
It will be fully operational by 2021, said the CEO.
The company which has its own entrepreneurship center also wants to create 200 small and medium-sized enterprises as part of the Vision 2030.
“This is a very important program,” said the CEO.
“There will be major expansions in all aspects of Saudi Aramco,” he said.