Riyadh 30 April, 2006. Mohamed Al-Mady, Vice Chairman and CEO of Saudi Basic Industries Corporation (SABIC), announced today that SABIC is a strategic partner in the formation of the Saudi Kayan Petrochemical Company.  This follows the signing of partnership agreements with Kayan for the establishment of the public stock company.  The new company's capital amounts to 12 billion Saudi Riyals.

The new company will be located in Al-Jubail Industrial City with an annual production capacity exceeding 4 million metric tons of petrochemical and chemical products.  45 percent of the capital will be offered for public subscription at a nominal value of 10 Saudi Riyals per share.  SABIC will hold a further 35 percent of the company's capital and Kayan will hold the remaining 20 percent.

Mr. Al-Mady expects the new company will go live in 2009 and it will add some specialized chemicals to the Saudi marketplace that will produced in Saudi Arabia for the first time.  These products include aminoethanols, aminomethyls, dimethylformamide, choline chloride, dimethylethanol, dimethylethanolamine, ethoxylates, phenol, cumene and polycarbonate.  This is in addition to ethylene, propylene, polypropylene, ethylene glycol, butene-1 and other products which will provide wide opportunities for downstream industries.

Mr. Al-Mady added that the new company will apply the latest state of the art world-class technologies that will enhance its competitive capabilities.

The new company plans to establish an applications center which will focus on development of industrial products and applications, especially polycarbonate research and other new added value downstream industries in Saudi Arabia.

It is worth mentioning that in January 2006, SABIC and Kayan signed an initial memorandum of understanding (MoU) for SABIC to enter as a partner in the new company.  The MoU provided for the review, all work studies and agreements and to update feasibility studies within a two-month period, prior to the signing of a final agreement.

-Ends-

NOTES TO EDITORS:
Saudi Basic Industries Corporation (SABIC) is the largest public company in the Middle East, ranked by market capitalization (more than US$ 150 billion), and one of the world's 10 largest petrochemicals manufacturers. The company is among the world's market leaders in the production of polyethylene, polypropylene, glycols, methanol, MTBE and fertilizers as well as the fourth largest polymer producer.

SABIC's profit rose to a record SR 19.2 billion (US$ 5.1 billion) in 2005, a 35% increase on 2004 and the company's highest profit since inception. Sales revenues for 2005 totaled SR 78.3 billion (US$ 20.8 billion), making SABIC the largest and most profitable public company in the Middle East.

SABIC operates six interlinked strategic business units: Basic Chemicals, Intermediates, Polyolefins, PVC and Polyester, Fertilizers and Metals.  The company has significant research resources and has dedicated Research and Technology centers in Riyadh, Geleen in the Netherlands, Houston USA and Vadodara in India.  SABIC has more than 17,000 employees worldwide.

SABIC has two large production sites in Saudi Arabia - in Al-Jubail and in Yanbu - comprising 18 world-scale complexes.  Some of these complexes are operated with multi-national joint venture partners such as Exxon Mobil, Shell and Mitsubishi Chemicals. SABIC's overall production capacity has increased from 35.4 million metric tons in 2001 to 46.7 million metric tons of production in 2005.

Headquartered in Riyadh, SABIC was founded in 1976 when the Saudi Arabian Government decided to use the hydrocarbon gases associated with its oil production as the principal feedstock for production of chemicals, polymers and fertilizers. The Saudi Arabian Government owns 70% of SABIC shares with the remaining 30% held by private investors in Saudi Arabia and other Gulf Cooperation Council countries.

SABIC Europe, headquartered in Sittard, the Netherlands, employs nearly 2,450 people and operates two petrochemical production sites in Geleen, the Netherlands and Gelsenkirchen in Germany for the production of polypropylenes, polyethylenes and liquid hydrocarbons. These are marketed by its European network of sales offices and logistical hubs. In 2005, SABIC Europe produced 2.3 million metric tons of polyolefins and 3.1 million metric tons of basic chemicals, mainly for the European market.

Othman Al-Humaidi
General Manager
Corporate Communications

Press Release 2006