DUBAI (ICIS)--Saudi Aramco and chemicals major SABIC have signed an agreement to develop a fully integrated crude oil to chemicals complex (COTC) in Saudi Arabia which is expected to start operations in 2025, the Saudi energy giant said on Sunday.
The complex is expected to process 400,000 barrels per day of crude which will produce about 9m tonnes/year of chemicals and base oils, Saudi Aramco said in a statement.
Financial details of the project were not disclosed.
By 2030, the COTC complex is expected to add 1.5% to Saudi Arabia’s gross domestic product, with investments being shared equally by both companies, the company said. The project is also expected to create an estimated 30,000 direct and indirect jobs.
The memorandum of understanding (MoU) signed between the two companies will govern the execution of the front end engineering design (FEED) before a final investment decision is made, it said.
“This project converges the commercial and strategic interests of both Saudi Aramco and SABIC, while reinforcing Saudi Aramco’s efforts to optimize the investment of our petroleum resource,” said Saudi Aramco president and CEO Amin Nasser.
“COTC will also help expand our downstream portfolio, reducing our focus on the transportation sector and securing new and promising commercial opportunities,” he said.
The project will also help realise Saudi Arabia’s Vision 2030, which aims to achieve “economic prosperity by boosting our investment capacity, diversifying the economy and creating jobs for Saudi nationals”, said SABIC vice chairman and CEO Yousef Abdullah Al-Benyan.
“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,” he added.
The MoU follows the heads of agreement (HoA) signed in June 2016 between the two companies, which governed the feasibility study for the development of a fully integrated petrochemicals complex in Saudi Aramco.
The agreement signed between Saudi Aramco and SABIC comes ahead of the Gulf Petrochemicals & Chemicals Association's (GPCA) 12th Annual GPCA Forum on 27-29 November this year in Dubai, UAE, with the theme “The chemical industry in transformation: A new journey begins”.
The forum is expected to attract more than 2,000 delegates this year.
Picture source: Saudi Aramco