Saudi Aramco and Total SA have joined hands for a $5 billion petrochemical complex that would be built near the refinery in Jubail.
The complex has been envisioned as a need to fulfill the growing demand in the Middle East and Asia. The preliminary deal for the construction of a 1.5 million tonnes a year steam cracker and petrochemicals units has already been signed between the two companies. As per the plan, the cracker will feed other petrochemical and specialty chemicals plants, to be built by other companies for $4 billion.
The project, to be built by the companies’ Satorp venture, is likely to create 8,000 jobs. It is part of Aramco’s plan to diversify from its core business of producing crude oil to expanding into value-added products as it plans the world’s biggest initial public offering. Aramco and Total will also benefit from some of the cheapest feedstock for the chemical plant.
“Saudi Arabia is a growing market” and “it’s also a place from where you can reach other markets in the Middle East and Asia,” Total Chief Executive Officer Patrick Pouyanne said. “Some French companies have plans to join us,” he said, citing water group Suez and tire-maker Michelin.
Aramco last week also signed an agreement with companies TechnipFMC Plc and Honeywell International Inc. to explore expanding chemical production along the US Gulf Coast.
Besides the petrochemicals project, more than the other dozen agreements were signed at the France-Saudi business forum Tuesday. These involved deals for companies such as Suez, Veolia Environnement SA, Saur, Schneider Electric SE, Orange SA, and their Saudi counterparts Aramco, Saudi Basic Industries Corp., PetroRabigh, and Saudi Electricity Co.