Saudi Aramco and Total signed a joint development agreement on Monday for the front-end engineering and design (FEED) of a giant petrochemical complex in Jubail, on Saudi Arabia's eastern coast, according to a joint press release from the companies.
The complex will comprise a mixed-feed cracker of 50 percent ethane and refinery off-gases – the first in the Gulf region to be integrated with a refinery – with a capacity of 1.5 million tons per year of ethylene and related high-added-value petrochemical units.
"Announced in April 2018, the world-class complex will be located next to the SATORP [The Saudi Aramco Total Refining and Petrochemical Company] refinery, operated by Saudi Aramco (62.5 percent) and Total (37.5 percent), in order to fully exploit operational synergies," the statement read.
The project represents an investment of around $5 billion and is scheduled to start up in 2024.
It will provide feedstock to other petrochemical and specialty chemical plants located in the Jubail industrial area and beyond, representing an additional $4 billion investment by third party investors benefiting the Saudi economy.
The overall complex will represent an investment of approximately $9 billion and is expected to create 8,000 local direct and indirect jobs.
Speaking at the signing ceremony in Dhahran, Saudi Arabia, Saudi Aramco President and CEO Amin H. Nasser said SATORP's second-phase expansion represented a "quantum leap" in Saudi Aramco’s downstream strategy to maximize its hydrocarbon resources and help position the Kingdom as a chemicals manufacturing hub, thus supporting economic diversification.
"Today's signing will deliver on multiple levels, from high-value fuels and petrochemical products for consumers on three continents to meaningful job creation and local content development. We’re pleased to celebrate with Total this latest milestone in the SATORP journey," he added.
Total CEO and Chairman Patrick Pouyanne said they were "delighted to write a new page of our joint history by launching a new giant project, building on the successful development of SATORP, our biggest and most efficient refinery in the world".
"This world-class complex also fits with our strategy to expand in petrochemicals by maximizing the synergies within our major platforms, leveraging low-cost feedstocks and taking advantage of the fast growing Asian polymer market," he added.
SATORP, the first such joint venture between the two energy companies, was established in June 2008 to build a refining and petrochemical complex in Jubail II industrial city.
The refinery, whose capacity increased from 400,000 barrels per day (bpd) of crude oil at its startup in 2014 to 440,000 bpd today, is recognized as one of the most efficient in the world, according to the statement.
By Hale Turkes