Saudi Aramco, Total and Daelim to develop petrochemical plant in kingdom

The plant will be located in the industrial city of Jubail

Aramco's refinery in the Jubail industrial city has a capacity of 305,000 barrels per day. Reuters

Saudi Aramco, Total of France and Daelim of South Korea have signed a preliminary agreement to develop an 80,000-tonne petrochemical plant in the kingdom's industrial city of Jubail that will come on-stream in 2024.

The plant, whose cost was not disclosed, will produce for the first time in the kingdom polyisobutylene, which is used to make adhesives, lubricants and fuel additives, Aramco said in a statement on Thursday.

"The new petrochemicals facility will be using feedstock from the Amiral complex in Jubail, located on Saudi Arabia’s eastern coast," it said.

"The facility’s location in Saudi Arabia will give Daelim access to competitive feedstock and energy, with large infrastructure, to better serve customers in the Middle East and markets across Europe and Asia."

Aramco, the world's biggest oil producing company, and Total signed in October an agreement for the engineering and design of a $5 billion (Dh18.3bn) petrochemicals complex in Jubail.

Aramco and other Arabian Gulf state-owned energy companies, including Abu Dhabi National Oil Company are expanding their refining and petrochemical capacities as part of efforts to eke out extra value from each barrel of oil and gas produced.

Saudi Arabia, the world’s biggest oil exporter, is planning to nearly double its refining capacity from current 5.4 million barrels of oil per day by expanding in the kingdom and abroad, where it has stakes in refineries in China, the United States, Japan and South Korea.