Saudi oil and chemical majors Aramco and SABIC announced the beginning of a new era in the petrochemical industry. They have signed an agreement to build one of the world’s largest oil-to-chemicals facilities, valued at US$20 billion, as Riyadh continues to diversify its economy away from reliance on crude revenues.
This move is expected to boost Saudi Arabia’s status globally on the level of manufacturing chemicals.
On the sidelines of the event, Aramco Chief Executive Officer Amin Nasser expressed optimism about the oil prices, expecting the increase in demand for oil after the balance between supply and demand.
Nasser added that the demand for oil is increasing, as this year saw an increase by about 1.6 million barrels per day and about five million barrels per day during the past three years.
By 2030, the plant is expected to have a 1.5 percent impact on Saudi gross domestic product, Nasser said, explaining that the products of the plant include benzene, diesel and basic materials for lubricants.
The complex would start operations in 2025, processing about 400,000 barrels per day of Arabian Light crude oil to produce about nine million tonnes of chemicals and base oils annually, plus 200,000 bpd of diesel for domestic consumption.
It is also expected to create 30,000 direct and indirect jobs.
For his part, SABIC’s Chief Executive Yousef al-Benyan said the project was the first time that Saudi Arabia’s two biggest companies were cooperating on a joint industrial project using a new technology. Investment costs would be shared equally.
“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,” said Benyan.
“The project will, therefore, help achieve the respective growth ambitions of SABIC and Saudi Aramco and further establishes the Kingdom as one of the pioneers in the petchems industry,” he added.