By Innovation-sa on December 3, 2017 in News
Saudi Arabia’s oil giant Saudi Aramco and chemical firm Saudi Basic Industries Corp (SABIC) have signed a memorandum of understanding (MoU) to establish an innovative crude oil to chemicals (COTC) complex worth $20 billion.
The planned COTC, which is expected to be the largest project in the world to convert crude oil to chemicals, and the first of its kind in the Kingdom, will commence its operations in 2025. It will convert 400,000 barrels of crude oil per day to about 9 million tonnes of chemicals and base oils annually.
The investment costs would be shared equally between Saudi Aramco and SABIC.
The venture aims to create 30,000 direct and indirect employment opportunities in the Kingdom. By 2030, it would contribute to 1.5% of Saudi Arabia’s gross domestic product (GDP).
The COTC complex will showcase highly innovative configuration developed by Saudi teams, which will achieve a crude oil to chemical conversion that is unprecedented in history.
“This project converges the commercial and strategic interests of both Saudi Aramco and SABIC, while reinforcing Saudi Aramco’s efforts to optimize the investment of our petroleum resources”, said Saudi Aramco President and CEO Amin H.Nasser.
With the government’s decision to sell up to 5 percent of its shares next year as an initial public offering (IPO), Saudi Aramco has been on the move to expand its downstream portfolio. COTC will further aid the oil giant to reduce its focus on transportation sector and secure a promising future in the commercial sector.
Yousef Abdullah Al-Benyan, Vice Chairman and CEO of SABIC, said that the project will help realize Saudi Arabia’s Vision 2030, which aims at achieving “economic prosperity by boosting our investment capacity, diversifying the economy and creating jobs for Saudi nationals”. Moreover, the new project would help SABIC to diversify and expand its operations, he added.
The two companies are in search of an ideal location for establishing COTC and Jeddah and Yanbu are under its prime consideration.