Advanced, SK Gas to construct SAR 6.75 bln complex in Saudi Arabia

Advanced Petrochemical Co. announced in a bourse filing, on March 27, the signing of a partnership agreement between its subsidiary, Advanced Global Investment Co. (AGIC), and SK Gas Petrochemical Pte. Ltd. (SKGP), a unit of SK Gas Co. Ltd.

Under the agreement, the newly-incorporated Advanced Polyolefins Co., a closed joint-stock firm, will build and operate propane dehydrogenation (PDH) and polypropylene (PP) complex with a design capacity of 843,000 metric tons per annum of propylene and 800,000 metric tons per annum of polypropylene in Jubail Industrial City.

AGIC will own 85% equity stake in the JV, financed by Advanced, while the remaining 15% will be owned by SKGP.

Meanwhile, the SAR 6.75 billion ($1.8 billion) project will be 25% financed by equity from shareholders and the remaining 75% of the joint stock firm through credit facilities.

Construction works are expected to begin in 2021 and will be supplied with propane (main feedstock) from Saudi Aramco on a long-term basis.

The company further said that the financial impact is expected to appear after the commencement of commercial operations by the second half of 2024, also noting that any major development related to the project shall be announced as per related regulations and instructions.

AGIC had already signed a conditional land allocation letter with Royal Commission in Jubail II, a license agreement with US-based Lummus Technology, for the supply of CATOFIN tech for the 843 kilo tons per annum (KTA) PDH plant, and license agreements with Basell Poliolefine Italia S.r.l. for the supply of SPHERIPOL and SPHERIZONE tech for the PP plants, with a capacity of 400 KTA each.

According to data compiled by Argaam, Advanced had announced last June the signing of a memorandum of understanding (MoU) between the 2 subsidiaries to establish a polypropylene and propylene complex worth SAR 6.9 billion.