Saudi Basic Industries Corporation (SABIC) announced that it is reassessing its joint project with Saudi Arabian Oil Co. (Saudi Aramco) to develop an industrial complex to convert crude-oil-to-chemicals (COTC) in Yanbu, Saudi Arabia. SABIC announced the signing of the original Memorandum of Understanding (MoU) with Aramco on November 26, 2017.
SABIC, headquartered in Riyadh, Saudi Arabia, has a global footprint serving its clients in 100 countries while operating in 50 countries across Americas, Europe, Middle-East & Africa and Asia-Pacific. In June 2020, Aramco completed the acquisition of a 70% stake in SABIC from the Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia, for a total purchase price of SAR259 billion (USD69.1 billion). The acquisition enhanced Aramco’s presence in the global petrochemicals industry, a sector which is expected to record the fastest growth in oil demand in the years ahead.
SABIC said the partners are considering expanding the project scope to include existing development programs of advancing crude-to-chemicals technologies, as well as through integrating existing facilities. This is done by taking into consideration both companies future plans and opportunities, SABIC said.
The decision comes as oil companies globally re-assess energy projects to conserve cash, due to demand destruction arising from the global Covid-19 pandemic.
“SABIC and Saudi Aramco are looking at opportunities for integration with existing facilities to maximise the economic value while evaluating the optimal technical options and market risks,” the company said in an announcement.
Consequently, both parties intend to re-evaluate the scope of the Crude-Oil-to-Chemicals (COTC) complex project and study the integration of Saudi Aramco’s existing refineries in Yanbu with a world-scale mixed feed steam cracker and downstream olefin derivative units.
“SABIC and Saudi Aramco remain committed to continue advancing crude-to-chemicals technologies through existing development programs with the goal of increasing cost efficiency, competitiveness and value creation opportunities for petrochemicals,” the company stated.