PARIS, Saudi Arabian oil entity Saudi Aramco and France’s oil giant Total have signed a Memorandum of Understanding (MoU) to build a huge petrochemical plant in the Jubail industrial region in western Saudi Arabia, a project with a potential value of over USD 9.0 billion, a statement said on Tuesday.
Total said in the statement that the deal coincided with the visit to France of Saudi Crown Prince Mohammad Bin Salman, who arrived in the French capital on Sunday for three days of top meetings, including several meetings with French President Emmanuel Macron and government ministers.
The MoU for the Jubail project involves an integrated downstream petrochemicals plant that will be 62.5 percent owned by Saudi Aramco, while Total will hold a 37.5 percent stake in the venture.
The project will be integrated with existing refining structures at the site.
On site production today at the “SATORP” Jubail refinery has already increased by 10 percent to 440,000 b/d over the past four years, according to Total, which labelled the refinery “world-class” and “recognized as being one of the most efficient in the world.” The new Saudi-French petrochemical complex will be located in the same industrial area as SATORP and it will include “a world-size, mixed-feed steam cracker (50 percent ethane and refinery off-gas) with a capacity of 1.5 million tons per year of ethylene and related high-added-value petrochemical units,” the Total statement indicated.
The new project will mean an initial investment of USD 5.0 billion, but other end-users of speciality chemicals from the plant are to invest another USD 4.0 billion on a third-party basis.
It is also expected that the project will generate 8,000 jobs, directly or indirectly.
Production at the planned petrochemical complex is estimated to be 2.7 million metric tons of high value chemicals, annually.
The project is part of a number of economic deals being examined by the Saudi Crown Prince and his delegation here and many of these will be finalised at a joint economic commission session later this year in Riyadh, and will coincide with a visit to the Kingdom by President Macron, sources at the President’s office indicated.
The project is also part of the Vision 2030 project being champions by Crown Prince Mohammad Bin Salman and focuses his plans to further develop and modernise several aspects of the economy.
Source: Kuwait News Agency