Saudi Aramco and French integrated oil and gas company Total have signed a memorandum of understanding (MoU) to build a petrochemical complex in Jubail, Saudi Arabia.
The MoU was signed during the visit to Paris by Saudi Arabia Crown Prince Mohammed bin Salman.
The complex will be integrated downstream of the SATORP refinery, a joint venture between Saudi Aramco (62.5%) and Total (37.5%) in Jubail.
The refinery’s capacity increased from 400,000 barrels per day at its launch in 2014 to 440,000 barrels per day currently.
Located next to the SATORP refinery, the petrochemical complex will comprise a mixed-feed steam cracker (50% ethane and refinery off-gas) with a capacity of 1.5 million tonnes per year of ethylene and related petrochemical units.
The project will represent an investment of around $5bn and the two companies plan to start the front-end engineering and design (FEED) in the third quarter of 2018.
The cracker will feed other petrochemical and speciality chemical plants representing an investment of $4bn by third-party investors.
In total, $9bn will be invested in the project, which is expected to create 8,000 local direct and indirect jobs.
The project will produce more than 2.7 million tonnes of high-value chemicals.
Saudi Aramco president and CEO Amin Nasser said: “The agreement deepens the exemplary relationship enjoyed by our two companies over many decades. It is one that has evolved from a standard buyer-seller arrangement to one imbued with common interests to further develop and diversify our businesses.
“Our joint venture SATORP is a remarkably successful model of industry partnership and we are keen to build on this success to further underpin Saudi Aramco’s strategy to expand its capacity in the chemicals sector by 2030.”
Total chairman and CEO Patrick Pouyanné said: “This project illustrates our strategy of maximising the integration of our large refining and petrochemical platforms and of expanding our petrochemical operations from low-cost feedstock, to take advantage of the fast growing Asian polymer market.”