MOSCOW (MRC) -- Saudi Basic Industries Corp and Royal Dutch Shell have shelved plans to expand an existing petrochemical joint venture in Saudi Arabia as the results of feasibility studies were not encouraging, reported Arabian Business.
The two partners in the joint project, known as SADAF joint venture in Jubail, on the Gulf coast of Saudi Arabia, first announced plans to explore an expansion of their petrochemical plant in 2012.
The expansion was due to add polyols, propylene oxide (PO) and styrene monomer. SABIC did not say by how much the plant was due to be expanded nor gave an estimated cost.
"Shell and SABIC have agreed not to pursue this investment further but have agreed to continue to have constructive discussions to explore other opportunities for expansion," a Shell spokesman said in a statement on Thursday.
SABIC, one of the world's largest petrochemical groups, said the decision would not have any impact on its earnings, according to a statement on the Saudi bourse website.
As MRC wrote before, in February 2013, Royal Dutch Shell took a final investment decision tol increase production capacity at its Singapore petrochemical plant to meet demand for specialized materials used in the automotive and furniture industries. The upgrade will increase the plant's capacity to produce polyols - industrial chemicals used to make high-quality foams - by more than 100,000 metric tpy to 360,000 tpy. The project is expected to be completed in 2014.
Saudi Basic Industries Corporation (SABIC) ranks among the world’s top petrochemical companies. The company is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.