Oct 09 2011 |
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Dow Chemical CEO: Aramco Mega JV To See $10B Revenues In 5 Yrs
Sunday, Oct 09, 2011
(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
By Summer Said
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.
(END) Dow Jones Newswires
09-10-11 0401GMT
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