SABIC, Sipchem sign MoU for $4.01bn worth of new projects

11 May 2009 03:11  [Source: ICIS news]

SINGAPORE (ICIS news)--Saudi Basic Industries Corporation (SABIC) and Saudi International Petrochemical Company (Sipchem) have signed a memorandum of understanding (MoU) for mutual cooperation on nine new plants in Al-Jubail costing $4.01bn (€2.93bn), the companies said on Saturday.

Out of the nine new plants, SABIC will construct seven facilities with an estimated investment of $3.2bn and would include facilities that could produce 250,000 tonnes of methyl metha acrylate (MMA), 30,000 tonnes of poly methyl methacrylate (PMMA), 200,000 tonnes of acrylonitrile (ACN), 50,000 tonnes of polyacrylonitrile, 50,000 tonnes of polyacetyl resins, 3,000 tonnes of carbon fiber and 40,000 tonnes of sodium cyanide annually.

Sipchem will construct the other two new plants under the MoU for an estimated cost of $810m and would be able to produce 125,000 tonnes/year of poly vinyl acetate and 200,000 tonnes/year of ethylene vinyl acetate.

All of the new plants are expected to go on-stream by mid-2013, the companies said.

A SABIC manufacturing affiliate would provide ethylene feedstock to the two units that Sipchem would construct while Sipchem will supply carbon monoxide to SABIC for the production of MMA.

“The two companies will utilize their existing infrastructure and manufacturing capacity to process Saudi Aramco feedstock allocated by Ministry of Petroleum and Mineral Resources for the new projects,” Sipchem said in a statement.

The company added that they would “move forward on these projects” after the completion of economic studies and legal procedures.

“Studies on the appropriate technology required for these projects are currently under way,” it said.

The aim of constructing the nine new plants was to promote and encourage local downstream industries such as automotive parts, electrical appliances, household commodities, computers and electronic equipment and health care and provide support to national downstream industries, especially the plastic industries sector, Sipchem said.

“As these industries are largely research-dependant, SABIC and Sipchem will establish specialized R&D centers to develop product applications,” it added.

($1 = €0.73)

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By: Bohan Loh
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