(This item was originally published Saturday.)
--Dow Chemical-Aramco petchem JV to generate $10 billion
revenues in five years
--Venture expected to be the equivalent of a Fortune 250
company
--Chemical project to spur job growth in Saudi, abroad
By Summer Said
Of ZAWYA DOW JONES
DHAHRAN, Saudi Arabia (Zawya Dow Jones)--Dow Chemical Co.'s
(DOW) top executive said Saturday a planned mega chemical project
with Saudi Arabian Oil Co. would generate annual revenues to the
tune of $10 billion in five years, making the joint venture the
equivalent of a Fortune 250 company.
"Five years from now, we expect the venture to be the equivalent
of a Fortune 250 company, generating over $10 billion in annual
revenue while spurring job growth in the kingdom and abroad,"
Andrew Liveris, Dow's chairman and chief executive officer, said at
the signing ceremony of the project in Dhahran in the Saudi
Arabia's Eastern Province.
State-run Aramco, the world's biggest oil company, and Dow
signed an agreement earlier Saturday to build one of the world's
largest chemicals plants in the oil-rich desert kingdom.
The partners will spend around $12 billion on building the
plant, located at Jubail on Saudi Arabia's Persian Gulf coast,
producing high-margin chemicals and plastics for fast-growing Asian
and Middle East markets, with another $8 billion earmarked for
third-party investors and contingencies.
Construction of the 26 plants that will make up the
complex--known as Sadara Chemical Co.--is scheduled to begin
immediately, with first output due to come on line in the second
half of 2015 and full operation scheduled for the following
year.
Sadara will produce polyeurethanes, propylene oxide, propylene
glycol, elastomers, linear low-density polyethylene, low density
polyethylene, glycol ethers and amines.
Saudi Arabia, the Middle East's biggest economy, has emerged as
one of the world's leading petrochemical hubs, driven by the wide
availability of cheap gas resources and buoyant demand from Asian
countries, notably China, which import petrochemical products from
Saudi Arabia and other Gulf countries to turn them into plastics
consumer goods.
Aramco has the capacity to produce 12.5 million barrels a day of
crude oil. The Sadara project represents Aramco's second major
investment in a large-scale petrochemical complex in the kingdom,
where it is already involved in a joint venture with Sumitomo
Chemical Co. (4005.TO) at Rabigh on the Red Sea.
Dow and Aramco will see their ownership in Sadara reduced to
around 40% each following a stock-market listing on the Saudi
bourse slated for 2013 or 2014.
-By Summer Said, Dow Jones Newswires; +966-546-842373;
summer.said@dowjones.com
Copyright (c) 2011 Dow Jones & Co.