MOSCOW (MRC) -- World No. 1 oil producer Saudi Aramco is set to gain unconditional EU antitrust approval for its USD69 billion buy of a 70% stake in petrochemicals group Saudi Basic Industries Corp (SABIC), reported Reuters with reference to people familiar with the matter.
Aramco announced the deal to acquire the controlling stake from sovereign investor Public Investment Fund (PIF) in March last year, a move key to its diversification into refining and petrochemicals.
Riyadh-headquartered SABIC, the world’s fourth largest petrochemicals group, has operations in over 50 countries.
The European Commission, which is scheduled to decide on the case by Feb. 27, declined to comment.
Competition watchdogs in India and a number of other countries have already given the green light without demanding concessions.
Aramco’s downstream expansion strategy tracks rivals such as Exxon Mobil, BP, Total and Shell, which have over the years transformed themselves from merely oil companies to energy companies with extensive upstream and downstream operations.
As MRC wrote earlier, in October 2019, McDermott International announced that it had been awarded a contract by Saudi Aramco and Total Raffinage Chimie (Total) for their joint venture (JV) Amiral steam cracker project at Jubail, Saudi Arabia. Amiral is a JV in which Aramco holds 62.5% and Total the rest. The plant, designed to produce 1.5 million metric tons/year (MMt/y) of ethylene, will be one of the world's largest mixed-feed crackers.
Aramco and Total launched their USD5-billion Amiral JV project in October 2018. The steam cracker will be fed with a mixture of 50% ethane and refinery off-gases. It will supply ethylene to a downstream 1 MMt/y polyethylene manufacturing complex and other petrochemical products. The project aims to fully exploit operational synergies with the adjacent refinery, owned by Satorp, another JV between Aramco and Total. Third-party investors, including Daelim and Ineos, will locate plants at the value park adjacent to Amiral with a combined investment of USD4 billion. A final investment decision is expected in 2021.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
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