Saudi Aramco, Total sign MoU to build giant petrochem complex in Jubail
11 Apr 2018
State-run Saudi Aramco and French oil major Total have signed a memorandum of understanding to build a giant petrochemical complex in Jubail, Saudi Arabia, alongside the SATORP refinery, which is a joint venture between Aramco (62.5 per cent) and Total (37.5 per cent).
The Saudi oil giant signed eight deals worth $10 billion with French firms on Tuesday, during Crown Prince Mohammed bin Salman’s visit to that country.
The move in Jubail, in a move designed to fully exploit operational synergies. This world-class refinery, whose capacity increased from 400,000-barrel-per-day at its start-up in 2014 to 440,000-barrel-per-day on Tuesday, is recognised as being one of the most efficient in the world.
Located next to the SATORP refinery in the same industrial area, the complex will comprise a world-size mixed-feed steam cracker (50 per cent ethane and refinery off-gas) with a capacity of 1.5 million tonnes per year of ethylene and related high-added-value petrochemical units. The project will represent an investment of around $5 billion. The two partners are planning to start the front-end engineering and design (FEED) in the third quarter of 2018.
The cracker will feed other petrochemical and specialty chemical plants representing an overall amount of $4 billion investment by third party investors.
In total, $9 billion will be invested, creating 8,000 local direct and indirect jobs. The project will produce more than 2.7 million tonnes of high value chemicals.
“The agreement deepens the exemplary relationship enjoyed by our two companies over many decades. It is one that has evolved from a standard buyer-seller arrangement to one imbued with common interests to further develop and diversify our businesses,“ commented Amin H Nasser, president and chief executive officer of Saudi Aramco. “Our joint venture SATORP is a remarkably successful model of industry partnership and we are keen to build on this success to further underpin Saudi Aramco’s strategy to expand its capacity in the chemicals sector by 2030.”
“This project illustrates our strategy of maximising the integration of our large refining and petrochemical platforms and of expanding our petrochemical operations from low-cost feedstock, to take advantage of the fast growing Asian polymer market," commented Patrick Pouyanné, chairman and CEO of Total. “Furthermore, this project will enable us to strengthen our ties with Saudi Aramco, with whom we successfully operate our biggest and most efficient refinery in the world. Finally, it will contribute to the Vision 2030 of the Kingdom by creating 8,000 jobs and bringing in new high-added-value technologies,” he added.
The company finalised the accords on Tuesday, at a Saudi-France economic forum during the official visit to Paris by Crown Prince of Saudi Arabia, Mohammed bin Salman.
Saudi Aramco is a leading global integrated energy and chemicals company, producing approximately one in every eight barrels of the world’s oil supply.