Saudi Basic Industries Corporation (SABIC), majorly owned by Saudi Aramco, stated on September 19th, 2021 that the petrochemical joint venture with ExxonMobil has started the commissioning before the expected Q4 deadline.
SABIC is one of the Middle East’s biggest petrochemical firms. The company has started its commissioning duties and is getting ready to initiate its joint venture project with energy biggie ExxonMobil in the Gulf Coast of the United States of America.
In 2019, SABIC established a petrochemical joint venture with ExxonMobil.
SABIC and ExxonMobil joint venture
The confirmation on September 19th, 2021 was released after a tour of the establishment in August, when Paul Fritsch, the plant manager, stated that the company would initiate the commission by the end of 2021.
The newly established complex inhabits a 1.8 million metric ton per year capacity of ethane-feed crackers. This ethane-fed cracker is one of the world’s largest ethane crackers. The complex will also feature one of the world’s biggest mono-ethylene glycol units which will have a capacity of approximately 1.1 million metric tons per year.
The establishment also encompasses two linear low-density polyethylene bodies – each boasts a capacity of 650,000 metric tons per year.
Polyethylene is utilized to manufacture plastic commodities like grocery bags, buckets, milk jugs, food packaging, etc. MEG (Methanol + Ethylene Glycol) is the raw material used to make Polyethylene Terephthalate (PET) and antifreeze, which is in turn used to manufacture polyester fiber and plastic bottles.
Saudi Aramco owns a 70% stake in SABIC. In 2019, the former has acquired shares valued at approximately USD 69.1 billion from the Public Investment Fund (PIF), the Kingdom of Saudi Arabia’s sovereign wealth fund.
The Saudi Arabian chemical manufacturer expects the joint venture to have an intended positive effect on its combined financial statements after the commercial operations commence.
The SABIC – ExxonMobil joint-venture project will support the former’s global development strategy via branching out its feedstock resources and establishing its petrochemical industrial presence in North America for a plethora of products.
The joint-venture complex is situated near Corpus Christi in Texas, USA. It is expected to become fully functional in the fourth quarter of 2021, earlier than the originally estimated 2022 date.
SABIC rose to profits in Q2 of 2021, by making SAR 7.64 billion (USD 2 billion). The petrochemical giant saw a SAR 2.22 billion loss in the same period in 2020.
Saudi Aramco stated that they would hand over the sales and marketing responsibilities for a portion of the oil giant’s polymers and petrochemicals to SABIC.
SABIC and ExxonMobil will also label the Aramco Trading Company to resell the former’s goods.
These changes will be executed in a phased manner in 2021. The changes are approved by both – ExxonMobil and SABIC.
Aramco’s President and Chief Executive, Ibrahim Al Buainain, stated that the handovers will resonate with the shared commitment of all companies involved to capitalize on the harmonizing nature of Aramco and SABIC’s respective products. The firm will strive to create an added value for consumers and shareholders alike.
A subsidiary of the PIF, Saudi Investment Recycling Company, authenticated an arrangement with SABIC in April 2021 to establish a project to utilize recycled plastic raw material.
The arrangement between the Saudi Investment Recycling Company and SABIC is also inclusive of practical research on the construction of a chemicals recycling unit in Saudi Arabia, that will convert mixed waste plastic into pyrolysis oil.
SABIC operates in over 50 countries inhabiting about 34,000 employees. It is headquartered in Riyadh, Saudi Arabia.
