By Arab News
By Siraj Wahab
Saudi Aramco and Dow Chemical Co. signed on Saturday in Dhahran a hugely significant joint venture agreement to build and operate a SR75 billion integrated chemicals complex in Jubail Industrial City.
The joint venture called “Sadara Chemical Company” will lead to one of the world’s largest chemical facilities, producing more than 3 million metric tons of chemical products and plastics a year.
Construction on the project has already begun at a place just 100 km from where the signing ceremony took place. The first production units will come online in the second half of 2015, with all units expected to be up and running by 2016.
Sadara is expected to deliver annual revenues of around $10 billion within a few years of operation and generate thousands of direct and indirect employment opportunities through the complex and related investments in downstream value parks.
The authorization, from the boards of directors of both companies, came on July 25, 2011, after an extensive project feasibility study and front-end engineering and design effort that began in 2007.
Speaking at the power-packed signing ceremony, Saudi Aramco President and Chief Executive Officer Khalid A. Al-Falih described Sadara as a game-changer in Saudi Arabia’s petrochemical industry.
“Sadara is a milestone for Saudi Aramco and a cornerstone of our transformational downstream growth strategy, which will add further value to our significant petroleum value chain,” said Al-Falih. “As the world’s largest integrated and most reliable supplier of energy and petroleum-based derivative products, our strengths complement those of Dow, the world’s foremost chemicals company with a global track record and unique suite of chemicals technology.”
Referring to Saudi Aramco’s strategic tie up with Dow Chemical Co., Al-Falih said: “It is a unique partnership that will be a success story for generations to come. We are looking forward to Sadara being an enabler of further economic development, entrepreneurial and employment opportunities in Saudi Arabia.”
Dow Chairman and Chief Executive Officer Andrew N. Liveris, who signed the agreement, agreed with Al-Falih’s assessment.
“This premier partnership is truly unprecedented and is very well positioned to bring value creation on every front; transforming the Saudi economy, as well as the entire chemical industry, at the same time,” said Liveris. “This is a great moment for Dow, our partner Saudi Aramco, and for the people of Saudi Arabia. I congratulate everyone who has worked so hard to see this vision become a reality.”
The massive joint venture is expected to generate thousands of direct and indirect employment opportunities. By the end of this year, Saudi Aramco and Dow plan to recruit hundreds of Saudi nationals as the first group of technical trainees for competitive and unique manufacturing and engineering training programs.
The 26 manufacturing-unit complex will include a world-scale cracker that will be able to process a wide range of feedstock and be supplied by Saudi Aramco’s extensive integrated hydrocarbon infrastructure.
The manufacturing units will produce a wide range of performance products such as polyurethanes, propylene oxide, propylene glycol, linear low-density polyethylene, low-density polyethylene, glycol ethers and amines.
Sadara will have responsibility for product marketing within a local zone of eight countries. Dow will market and sell on behalf of Sadara to all countries outside the Middle East.
Minister of Petroleum and Mineral Resources Ali Al-Naimi presided over the signing ceremony. Among the other notable guests were Finance Minister Ibrahim Al-Assaf; Chairman of the Royal Commission for Jubail and Yanbu Prince Saud ibn Abdullah ibn Thunayan; and Prince Faisal ibn Turki ibn Abdulaziz Al-Saud, adviser at the Ministry of Petroleum and Mineral Resources; and top executives of both companies.
Owned by the Saudi government, Saudi Aramco is a fully integrated, global petroleum enterprise and a world leader in exploration and production, refining, distribution, shipping, marketing and petrochemicals manufacturing. The company manages 260.1 billion barrels of proven reserves of crude oil, the largest, and 279 trillion cubic feet of gas reserves, the fourth largest in the world.