Saudi Arabia seals petrochemical investment deals worth more than $2bn​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Top global companies are set to invest in the kingdom’s petrochemicals sector

The Saudi Arabian General Investment Authority, in partnership with the United Nations Conference on Trade and Development, will host the Global FDI Summit in Riyadh in October. Courtesy Sagia

Saudi Arabia sealed more than $2 billion (Dh7.34bn) in investment deals with top global companies and local entities to boost the petrochemicals sector in the kingdom.

The Saudi Arabian General Investment Authority (Sagia) said on Thursday over 80 representatives of more than 13 government and private sector entities from the kingdom and across the globe convened in Riyadh to sign the new agreements.

“The petrochemicals sector provides exciting opportunities for international investors as we look to draw on the expertise and experience of the private sector in transforming the industry. This meeting and the MoUs that have been exchanged today — reflect our increasing focus on promoting opportunities and facilitating international partnerships to drive the growth of this strategic sector,” said Ibrahim Al Omar, governor of Sagia in a statement.

Germany’s BASF, France’s SNF, Japan’s Mitsui&Co, Shell and AMG (Advanced Metallurgical Group) are among the top companies  planning to invest in Saudi Arabia.

Sagia and SNF will evaluate the establishment of a polyacrylamide plant in Jubail with a capacity of 50,000 tonnes per annum. The project is expected to provide 80 new job opportunities, Sagia said.

The company also signed an agreement with Mitsui & Co to set up an ammonia commercial production plant in Jubail with an estimated capacity of 1 million tonnes per annum.

In other deals, Sagia and Shell will look to build a state-of-the-art residue upgrading catalyst manufacturing facility in Jubail Industrial City, subject to regulatory approvals. AMG and Shell will also assess the feasibility of building a facility to reclaim valuable metals by recycling spent residue upgrading catalysts generated by refineries in Saudi Arabia and the surrounding region.

“This agreement with Sagia and AMG reflects Shell’s interest in growing its presence in Saudi Arabia and serving its clients locally and regionally through a world class end-to-end business solution utilising our extensive expertise in catalyst technologies,” said Andy Gosse, president of Shell catalysts & technologies.

The latest investments come alongside a broad series of economic reforms, which are enabling rapid growth in foreign investment in Saudi Arabia. According to Invest Saudi Fall 2019 report, over 250 overseas businesses were granted investor licenses in the third quarter of 2019, marking a 30 per cent increase compared to the same period last year.

Earlier this month, Saudi Arabia climbed 30 places in the World Bank’s Doing Business 2020 report, rising to 62nd place and becoming the most-improved economy globally. According to the report, Saudi Arabia’s rise up the ranking was driven by key reforms including lifting foreign ownership restrictions in a range of new sectors, while adopting faster and less complicated business registration procedures by rolling out a one-stop shop for business registration.