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DHAHRAN / Reuters
State oil giant Saudi Aramco and petrochemical producer Saudi Basic Industries Corp (SABIC) signed a memorandum of understanding on Sunday to build a $20 billion complex converting crude oil to chemicals in
the kingdom.
The project, which the partners said would be the largest crude-to-chemicals facility in the world, is a sign that the Saudi government plans to spend heavily on diversify-
ing the economy beyond crude oil exports.
Riyadh aims to invest bill-
ions of dollars on developing value-added manufacturing
industries such as chemicals,
as well as service industries
like tourism.
Aramco Chief Executive Amin Nasser told reporters that a final decision on whether to go ahead with the crude-to-chemicals project would be made by the end of 2019.
His company was tentatively looking at the Red Sea port city of Yanbu, already an industrial centre, as the location for the project, he added.
The complex would start
operations in 2025, proces-
sing about 400,000 barrels per day of Arabian Light crude
oil to produce about 9 million tonnes of chemicals and
base oils annually, plus 200,000 bpd of diesel for domestic
consumption.
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 indus-trial project using a new technology. Investment costs would be shared equally.
Aramco, the world’s largest oil company, has been developing its downstream business
as it prepares for the government to sell off about 5 per-
cent of its shares next year, a privatisation exercise which Riyadh says could raise around $100 billion.
The new complex would create an estimated 30,000 jobs directly and indirectly and add 1.5 percent to Saudi Arabia’s gross domestic product by 2030, the companies said.