Saudi Aramco and Dow Chemical Co. plan to finalize the details of a joint venture in the next few weeks to build one of the world's largest petrochemicals complex in Saudi Arabia, sources said Friday. The joint venture will give Dow access to cheap Saudi gas feedstock and proximity to customers in Asia, Africa and Europe. Saudi Aramco gets a dedicated revenue source for the foreseeable future, part of its plan to expand its petrochemical industry and diversify away from oil alone. The project, announced in 2007, will come together by the end of this month or early August, giving the green light for construction to begin, sources said. Aramco and Dow Chemical both said earlier that the proposed joint venture petrochemical project continues to make progress with the front-end engineering and design (FEED) work expected to be completed in mid-2011. They confirmed that they have decided on Jubail Industrial City as the planned site location for the project. The decision comes after having evaluated a broad set of variables, which includes anticipated infrastructure benefits and various potential business integration opportunities. Jubail Industrial City is the largest industrial complex of its kind in the world. “This project will leverage our largest refining asset and enhance its profitability by capitalizing on the value addition opportunities and synergies existing between refining and petrochemicals,” former Saudi Aramco president & CEO Abdallah S. Jum'ah said when an MoU was signed between the two companies in 2007. Eng. Khalid Bin Abdulaziz Al-Faleh replaced him as the new President and and CEO of Aramco effective from Jan. 1, 2009. “The wide range of chemical materials and plastics to be produced by the joint venture will help spawn other downstream chemical conversion industries, thus strengthening the role of the chemical sector as a key enabler of many other future investments in the Kingdom of Saudi Arabia,” Jum'ah added. “The downstream industries to be fed by the materials to be manufactured by the joint venture will assist in further expanding the national economic base while promoting economic diversification and capitalizing on the vast job creation potential of these industries.” Abdulaziz Al-Judaimi, Saudi Aramco's Vice President responsible for the project said: “We continue to execute the project. The commitment of both partners demonstrates the strategic importance of this project and the benefits of investing in the Kingdom of Saudi Arabia.” Dow Senior Vice President Jim McIlvenny said: “The project has and continues to benefit from the shared dedication and hard work of top talent from Dow and Saudi Aramco. The project team will continue to evaluate all variables that could impact the ultimate investment decision and the relevant stakeholders.” Major contracts on their $18 billion petrochemical JV at Jubail to US and South Koran firms.
