LONDON (ICIS)--Saudi Aramco and Total have signed a memorandum of understanding (MoU) to build a “giant” petrochemical complex at their SATORP refinery in Jubail, eastern Saudi Arabia, the French energy major said on Tuesday.
The complex will be integrated downstream of the SATORP refinery, a joint venture between Aramco (62.5%) and Total (37.5%).
The refinery has the capacity to process 440,000 bbl/day.
Total said total capital expenditure (capex) for the project would stand at around $5bn.
The companies are planning to start the front-end engineering and design (FEED) in the third quarter.
“The cracker will feed other petrochemical and specialty chemical plants representing an overall amount of $4bn investment by third party investors,” said total.
“In total, $9bn will be invested, creating 8,000 local direct and indirect jobs. The project will produce more than 2.7m tonnes [/year] of high value chemicals.”
The MoU between Total and Aramco (a state-owned company) was signed in Paris on Tuesday, coinciding with the official visit to the French capital of Saudi Crown Prince Mohammed bin Salman.
The petrochemical complex would also share industrial space with Sadara Chemical Company, the joint venture between Aramco (65%) and Dow Chemical (35%)
The move would fit Saudi Arabia’s ambitions to diversify its economy away from crude oil and into more downstream sectors, according to Aramco’s CEO Amin H. Nasser.
The country has framed the strategy within the Saudi Vision 2030, announced in 2016.
“Our joint venture SATORP is a remarkably successful model of industry partnership and we are keen to build on this success to further underpin Saudi Aramco’s strategy to expand its capacity in the chemicals sector by 2030,” said Nasser.
Total’s CEO, Patrick Pouyanne, said production from the complex would target the growing Asian urban, middle class markets and their need for polymers.
He also highlighted how the facility’s location would take advantage of the Saudi Arabia’s plentiful and affordable feedstock.
“Furthermore, this project will enable us to strengthen our ties with Saudi Aramco, with whom we successfully operate our biggest and most efficient refinery in the world,” said Pouyanne.
“Finally, it will contribute to the Vision 2030 of the Kingdom by creating 8,000 jobs and bringing in new high-added-value technologies.”
Proposed location for Total and Aramco's petrochemical complex
Pictured above: Two workers at the SATORP refinery at Jubail, Saudi Arabia
(Adds CEOs commentary from paragraph 9)