MOSCOW (MRC) -- Sabic has signed a Project Development Agreement (PDA) with Shenhua Ningxia Coal Industry Group Co. Ltd. (SNCG), a subsidiary of Shenhua Group Corporation Limited, to be effective by May 30, 2016, said the producer on its site.
The PDA relates to the two parties’ potential joint development of a greenfield petrochemical complex to be located in the Ningxia Hui Region of China. The parties would proceed with further actions to implement the project in the event of a positive final investment decision and subject to obtaining all necessary governmental approvals. The joint venture would benefit from its location in Ningxia and utilize locally available coal feedstocks to be supplied by SNCG.
The PDA provides a basis for the parties to conduct a joint feasibility study on the project, within three years starting from the date when the agreement became effective, and, subject to a positive outcome, to prepare and submit the materials necessary to obtain Project Application Report approval (PAR Approval) from the National Development and Reform Commission (NDRC) of the Peoples’ Republic of China.
This project is part of SABIC’s ongoing strategy to geographically diversify its operations and to seek future investment opportunities that opens doors to new markets. Sabic will announce further details in due course.
HRH Prince Saud Bin Abdullah Bin Thenayan Al Saud, Chairman of the Royal High Commission for Jubail and Yanbu and Chairman of Sabic highlighted the importance of the agreement, "This agreement clearly reflects Sabic’s desire to expand its global operations and get ever closer to our customers. Sabic’s ongoing strategy is to geographically diversify our operations and seek future investment opportunities that open doors to new strategic markets."
Sabic Vice Chairman & CEO, Yousef Al-Benyan commented on this agreement saying, "This project reflects our enthusiasm to diversify our sources of feedstock, paving the way for further investment opportunities that depend on different and untraditional sources of feedstock. This protects SABIC against the fluctuations and cyclical movements in feedstock price in the international markets, which helps ensure a profitable growth strategy."
As MRC reported earlier, in 2014, Sabic and the Korean petrochemical company, SK Global Chemical, signed a 50-50 joint venture agreement in Seoul, South Korea, for a total investment of USD595 million to manufacture a range of high-performance polyethylene products using SK’s cutting edge Nexlene solution technology. The joint venture, which is located in Singapore, is expected to operate a series of manufacturing plants, the first of which was recently completed by SK Global Chemical at its complex in Ulsan, South Korea, with an expected annual capacity of 230,000 tons. The plants will produce metallocene linear low density polyethylene, polyolefin plastomers and polyolefin elastomers that will meet the growing needs of diverse industries such as advanced packaging, automotive, healthcare, footwear and electrical and lighting. A second plant is planned for Saudi Arabia.
Sabic is a diversified manufacturing company, active in chemicals and intermediates, industrial polymers, fertilizers and metals. It is the largest public company in Saudi Arabia. It is the largest company in the Middle East.
Sabic is currently the second largest global ethylene glycol producer and is expected to become number one after the introduction of these new projects. Sabic is the third largest polyethylene manufacturer, the fourth largest polyolefins manufacturer and the fourth largest polypropylene manufacturer. It is also the world's largest producer of mono-ethylene glycol, MTBE, granular urea, polyphenylene and polyether imide.
MRC