Saudi oil giant Aramco has signed an agreement with US Dow Chemical Company to build a $20 billion petrochemical joint venture in Jubail industrial area.

Once complete, the Sadara Chemical Company complex will be one of the world’s largest integrated chemical facilities, and the largest ever built in a single phase, said an Aramco statement.

Saudi Aramco and Dow had announced their respective Board authorizations to form the JV on July 25, it added.

The JV will help drive downstream industries and support economic growth in Kingdom and emerging markets, said Saudi Aramco president and CEO Khalid A. Al-Falih and Dow chairman and CEO Andrew N. Liveris after signing the JV deal on Saturday.

Saudi Minister of Petroleum and Mineral Resources and chairman of Saudi Aramco Ali Ibrahim Al-Naimi presided over the ceremony.

The landmark event was held in the presence of Dr Ibrahim Al-Assaf, Saudi Arabia Minister of Finance; Prince Saud ibn Abdullah ibn Thunayan, chairman of the Royal Commission for Jubail and Yanbu; and Prince Faisal Bin Turki Bin Abdulaziz Al-Saud, advisor, Ministry of Petroleum and Mineral Resources and officials of both companies.

Today’s event is another major step forward for Sadara, which will be comprised of 26 manufacturing units, several of which constitute “mega projects” in themselves, the statement said.

Just over 100 km from where Al-Falih and Liveris signed the agreement, bulldozers, graders and rollers are proceeding with site preparations on the world-scale, mixed feed cracker, which will be integrated with Saudi Aramco’s extensive hydrocarbon infrastructure.

Commenting on the deal, Liveris said, 'Sadara is an extraordinary and unique venture that will build upon the strengths of both Dow and Aramco to deliver the diversified and specialty materials and chemicals needed to drive growth in the entire region and beyond.'

'This premier partnership is truly unprecedented and is very well positioned to bring value creation on every front; transforming the Saudi economy, as well as the entire chemical industry, at the same time,' he noted.

'This is a great moment for Dow, our partner Saudi Aramco, and for the people of Saudi Arabia. I congratulate everyone who has worked so hard to see this vision become a reality,' he added.

Sadara is expected to deliver annual revenues of approximately $10 billion within a few years of operation while contributing significantly to Saudi Arabia’s industrial diversification.

The planned product portfolio will add value chains to the Kingdom’s vast natural resources and complement the existing chemical landscape.

Ultimately, the JV will be instrumental in Saudi Arabia’s strategy to become not only a strategic chemicals and plastics producer, but also a hub for future downstream manufacturing.

Al-Falih described Sadara as a milestone for Saudi Aramco and a cornerstone of its transformational downstream growth strategy, which will add further value to the company's significant petroleum value chain.

'As the world’s largest integrated and most reliable supplier of energy and petroleum-based derivative products, our strengths complement those of Dow, the world’s foremost chemicals company with a global track record and unique suite of chemicals technology,' he noted.

'I am confident that Sadara will be a game-changer in the Kingdom’s petrochemical industry as it has all the needed ingredients for success,' Al-Falih said.

'It is a unique partnership that will be a success story for generations to come. We are looking forward to Sadara being an enabler of further economic development, entrepreneurial and employment opportunities in Saudi Arabia,' he added.-TradeArabia News Service