Saudi Aramco has signed a preliminary agreement with SABIC to start work on developing a US$20 billion fully integrated crude oil to chemicals (COTC) complex in Saudi Arabia.
The agreement governs the execution of the Front End Engineering Design (FEED) before a final investment decision is made, Saudi Aramco said in a statement.
The COTC complex is expected to process 400,000 barrels per day of crude oil, which will produce approximately 9 million tons of chemicals and base oils annually and is expected to start operations in 2025.
“This project converges the commercial and strategic interests of both Saudi Aramco and SABIC, while reinforcing Saudi Aramco’s efforts to optimise the investment of our petroleum resources. COTC will also help expand our downstream portfolio, reducing our focus on the transportation sector and securing new and promising commercial opportunities,” said Saudi Aramco president and CEO Amin H. Nasser.
SABIC vice chairman and CEO Yousef Abdullah Al-Benyan said the project will help Saudi Vision 2030 by diversifying the economy and creating jobs for Saudi nationals.
“It will help strengthen our economic growth and attract world-class quality investments thanks to our unique and strategic geographic location," he added.
Al-Benyan said it is the first time the two largest economic entities in Saudi Arabia jointly enter into a strategic partnership to achieve a pioneering and innovative new technology.
“Once completed, this project will not only be the largest crude oil to chemicals complex in the world, it will also set a new competitive threshold thanks to the project's mass scale and the benefits derived from our joint collaboration.”
The project aims to substantially increasing production and further maximise value across Saudi Arabia’s entire hydrocarbons chain through integration. The COTC complex will be constructed based on an innovative configuration that achieves crude oil to chemicals conversion that is unprecedented in the industry.
This agreement follows the Heads of Agreement (HoA) signed in June 2016 between the two companies, which governed the feasibility study for the development of a fully integrated petrochemicals complex in the Kingdom.
The complex is expected to create an estimated 30,000 direct and indirect jobs, further stimulating the Kingdom’s economic diversification. By 2030 the COTC complex is expected to have 1.5 per cent impact on the Kingdom’s Gross Domestic Product (GDP), with investments being shared equally by both companies, Saudi Aramco said.