Dow, Saudi Aramco partner on US$20 billion petrochemical complex

In a move designed to create one of the world’s largest integrated chemical facilities, Dow Chemical Co. and Saudi Arabian Oil Co. have set up a 50-50 joint venture to build a US$20 billion petrochemical plant at the Persian Gulf port of Jubail.

The decision by both companies’ boards to create the new venture, dubbed the Sadara Chemical Co., formalizes a project that has been in the works since 2007. The venture will have capacity to make more than three million metric tons of chemicals annually, the companies said in a statement. The first production unit will start operating in the second half of 2015, and the facility will be completed by 2016, the statement continued.

“This enterprise will play a key role in the kingdom’s industrial and economic diversification while contributing to the creation of thousands of high-quality jobs,” Khalid Al- Falih, the CEO of Saudi Aramco, as the state oil company is known, said in the statement. “It will enable significant development in the country’s conversion industry.”

According to Andrew Liveris, Midland, Mich.-based Dow’s chairman and CEO, customers in emerging markets such as China, the Middle East, Eastern Europe and Africa will benefit from the venture, which is expected to “deliver significant new equity earnings to Dow.”