Memorandum of Understanding Saudi Aramco and Sabic to Plan Oil-to-Chemicals Project
National oil giant Saudi Aramco expects soon to sign a memorandum of understanding with Saudi Basic Industries Corp for a joint oil-to-chemicals project, Reuters said
Dharan, Saudi Arabia — National oil giant Saudi Aramco expects soon to sign a memorandum of understanding with Saudi Basic Industries Corp for a joint oil-to-chemicals project, Reuters said
Sabic has previously said the proposed project could cost as much as $30 billion, processing petrochemicals directly from crude oil instead of first refining the oil into products such as naphtha.
"It makes absolute sense as Aramco is specialised in oil and refining, and SABIC in petrochemicals," said one industry source familiar with the project, adding that the scheme could create as many as 100,000 jobs directly and indirectly.
Aramco's participation could benefit Sabic by giving it better access to funding as well as assistance in marketing products, said Mazen al-Sudairi, head of research at Al-Istithmar Capital.
"The change in feedstock prices prompted Sabic to change strategy - they want to produce specialty products — and with Aramco possibly joining them as an investor, it will open a big door for them," he said. (Reporting by Rania El Gamal; Additional reporting by Reem Shamseddine in Saudi Arabia; Writing by Andrew Torchia)