Aramco, SABIC ink deal to develop crude-oil-to-chemicals complex
The planned crude-oil-to-chemicals complex is expected to process 400,000 barrels per day of crude oil, which will produce approximately 8.2 tonnes of chemicals and base oils annually
Saudi Aramco has signed a memorandum of understanding (MoU) with Riyadh-headquartered petrochemicals manufacturer, SABIC, to develop a facility that would convert crude oil to chemicals (COTC).
In a statement, Saudi Aramco said that the planned COTC complex is expected to process 400,000 barrels per day of crude oil, which will, in turn, produce approximately 8.2 tonnes (9 million tons) of chemicals and base oils annually.
The facility is expected to commence operations in 2025, revealed Saudi Aramco.
Amin H Nasser, president and chief executive officer (CEO) of Saudi Aramco, said: “This project converges the commercial and strategic interests of both Saudi Aramco and SABIC, while reinforcing Saudi Aramco’s efforts to optimise 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.”
Meanwhile, Yousef Abdullah Al-Benyan, SABIC vice chairman and CEO, commented: "This venture will contribute to the realisation 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."
Al-Benyan added: "Once completed, this project will not only be the largest crude-oil-to-chemicals complex in the world, it will also set a new competitive threshold, thanks to the project's mass scale and the benefits derived from our joint collaboration.”
The MoU follows the heads of agreement (HoA) that the two companies signed in June 2016.
According to Saudi Aramco, the HoA governed the feasibility study for the development of a fully integrated petrochemicals complex in the kingdom, while the recently signed agreement governs the execution of the front end engineering design (FEED), before a final investment decision is made.
The oil giant further revealed that the proposed complex is expected to create an estimated 30,000 direct and indirect jobs, and to boost the country’s gross domestic product (GDP) by 1.5% by 2030.
Investments will reportedly be shared equally by both companies.