Saudi Aramco, Sabic sign MOU build oil-to-chemicals complex

Saudi Aramco, Sabic sign MOU to build oil-to-chemicals complex

4:54 AM, 27th November 2017
Saudi Aramco and Sabic signing ceremony.
Saudi Aramco and Sabic signing ceremony.

DHAHRAN, SAUDI ARABIA: Saudi Aramco and Sabic have signed a memorandum of understanding (MoU) to develop a fully integrated crude oil-to-chemicals (COTC) complex in the Kingdom of Saudi Arabia. This governs the execution of the front-end engineering design (FEED) before a final investment decision is made.

The COTC complex is likely to process 400,000 barrels per day of crude oil, which will produce approximately 9 million tonnes of chemicals and base oils annually. The complex is expected to start operations in 2025.

This announcement marks a historic alliance between the two largest Saudi global entities, in addition to solidifying the Kingdom’s position as a global leader in chemicals by substantially increasing production and further maximizing value across the entire hydrocarbons chain through integration. The COTC complex will be constructed based on an innovative configuration that achieves crude oil-to-chemicals conversion that is unprecedented in the industry.

This MoU follows the heads of agreement (HoA) signed in June 2016 between the two companies, which governed the feasibility study for the development of a fully integrated petrochemicals complex in the Kingdom.

The complex is expected to create an estimated 30,000 direct and indirect jobs, further stimulating the Kingdom’s economic diversification. By 2030 the COTC complex is expected to have 1.5 percent impact on the Kingdom’s gross domestic product (GDP), with investments being shared equally by both companies.

“This project converges the commercial and strategic interests of both Saudi Aramco and Sabic while reinforcing Saudi Aramco’s efforts to optimize the investment of our petroleum resources. COTC will also help expand our downstream portfolio, reducing our focus on the transportation sector and securing new and promising commercial opportunities,” said Amin Nasser, president and CEO, Saudi Aramco.

"This venture will contribute to the realization of one of the major aspirations of Saudi Vision 2030, namely achieving economic prosperity by boosting our investment capacity, diversifying the economy and creating jobs for Saudi nationals. It will help strengthen our economic growth and attract world-class quality investments thanks to our unique and strategic geographic location," added Yousef Abdullah Al-Benyan, vice chairman and CEO, Sabic.

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