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Advanced signs agreement for SAR 6.75bn petrochemical plants

Advanced signs agreement for SAR 6.75bn petrochemical plants
Both companies will establish a Saudi closed joint stock company
-0.30% 49.75 -0.15

Riyadh – Mubasher: Advanced Petrochemical Company announced that its subsidiary, Advanced Global Investment Company, has inked a partnership agreement with SK Gas Petrochemical, SK Gas Company's subsidiary.

Under the agreement, both companies will establish a Saudi closed joint-stock company, Advanced Polyolefins Company, to build and operate a propane dehydrogenation as well as polypropylene plants at a cost of SAR 6.75 billion ($1.8 billion), according to a disclosure to the Saudi Stock Exchange (Tadawul) on Sunday.

To be constructed in Jubail Industrial City in Saudi Arabia, the plants have production capacities of 843,000 tonnes and 800,000 tonnes per annum of propylene and polypropylene, respectively.

Meanwhile, Advanced Global Investment Company will own an 85% stack in the joint company, which will fund 75% of the project by borrowing from lenders.

The remaining 25% of the project will be financed by equity from shareholders.

The plants' construction process is expected to begin in 2021, with financial impact to be registered following the commencement of commercial operation by the second half (H2) of 2024.

Saudi Aramco will supply the plants with propane on a long-term basis.