British chemicals company Ineos will spend $2 billion (Dh7.3bn) building three petrochemicals plants in collaboration with Saudi Aramco and Total in the industrial city of Jubail in the eastern province of Saudi Arabia.
The agreement marks the first investment in the Middle East by the company, which is owned by British billionaire Jim Ratcliffe. The private chemicals operator, founded in 1998, is the world's fifth-largest chemical producer by chemical sales behind Saudi Arabia's Sabic. As part of the agreement, Ineos will build a 425,000-tonne acrylonitrile plant, which is set for a start-up in 2025.
Acrylonitriles are organic compounds used in the manufacture of polyamides that find varied uses in the production of synthetics and fumigants.
“This is a major milestone for Ineos ...The timing is right for us to enter this significant agreement in Saudi Arabia with Saudi Aramco and Total," Mr Ratcliffe said. "We are bringing advanced downstream technology which will add value and create further jobs in the kingdom.”
Downstream refers to the segment of the energy value chain that includes refining as well as the manufacture of chemicals and products.
Saudi Arabia has looked to expand its petrochemicals industry, focusing on the manufacture of speciality chemicals as it looks to capitalise on growing demand for such products in Asia.
Saudi Aramco, the world’s biggest oil-exporting company, recently acquired 70 per cent of Sabic, the region’s largest chemicals operator as it looks to leverage its feedstock base to strengthen its chemicals portfolio.
Plans under way in the kingdom include a $20bn oil-to-chemicals plant on the country’s Red Sea coast as well as a $5bn integrated refinery in the Jubail industrial complex with French oil major Total.
As part of its investment, Ineos plans to build a 400,000-tonne linear alpha olefin as well as an associated poly alpha olefin plant, both of which begin production in 2025. Linear alpha olefins are used in the manufacture of polyethylene, a basic building block for plastics as well as detergents.
Poly alpha olefin is a common synthetic base oil used in the manufacture of industrial and automotive lubricants.
Jubail has become a hotspot for downstream activity.
Saudi Aramco and Total are looking to invest about $9bn in their integrated refinery, with $4bn to be spent on providing feedstock for other petchems and speciality chemical plants in the area.
Jubail is also home to other joint investment facilities such as the 202-hectare Sabic and Shell-operated Sadaf ethylene complex. The plant produces ethylene, ethyl-benzene, styrene, ethylene dichloride, chlorine, caustic soda and crude industrial ethanol. Ethylene finds a wide range of use in the chemicals industry, especially in the manufacture of plastics.
