Saudi Basic Industries Corporation (Sabic) and Shell have announced that they are progressing plans for the expansion of various projects at the Saudi Petrochemical Company (Sadaf). The joint venture partners are also looking to expand their partnership beyond Saudi Arabia.

Both parties are developing a full range of polyols (a polyurethane building block) and styrene monomer propylene oxide (SMPO) plants at the existing Sadaf site, which is located in one of the world’s largest and most competitive petrochemical complexes – the Al Jubail industrial zone on Saudi Arabia’s eastern coast. Sabic and Shell will jointly conduct the necessary studies to implement the project.

The proposed full range of polyols and SMPO plants would be the first of their kind in the Middle East. The assets would employ Shell’s proprietary polyols and SMPO technologies to produce chemical building blocks for the polyurethanes industry and petrochemicals sector in the Middle East and beyond. The partners are committed to the polyurethanes, styrene, propylene oxide and derivatives sectors, and have access to leading technologies as major international suppliers.

Mohammed Al Mady, Sabic vice chairman and CEO, comments: "We are pleased to be deepening our partnership with Shell. This investment will respond to demands for solutions from our global customer base. These sectors include building and construction, automotive and transportation, furniture and bedding, sports goods, food packaging, cold chain and refrigeration, and home appliances industries. Our polyurethane solutions will offer strength and flexibility, variable rigidity and insulation properties in a wide range of applications."

Developing the polyurethane sector in Saudi Arabia will contribute to necessary energy savings and create job opportunities for the growing skilled workforce.

Ben van Beurden, executive vice president for Shell Chemicals, says: "Sabic ranks among the world’s top petrochemical companies and operates in over 40 countries. We are delighted to expand our successful, long-standing partnership of more than 30 years. The proposed SMPO and polyols plants will help strengthen Shell’s global propylene oxide and polyols manufacturing capacity, boosting our supply to customers worldwide."

Sabic ranks among the world’s top petrochemical companies. The company is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilisers.

Sabic recorded a net profit of SR29.24 billion ($7.80 billion) in 2011. Sales revenues for 2011 totaled SR 189.90 billion ($50.64 billion). Total assets stood at SR332.78 billion ($88.74 billion) at the end of 2011.

Sabic’s businesses are grouped into chemicals, polymers, performance chemicals, fertilisers, metals and innovative plastics. Sabic has significant research resources with 16 dedicated technology and innovation facilities in Saudi Arabia, the US, the Netherlands, Spain, Japan, India and South Korea. The company operates in more than 40 countries across the world with around 40,000 employees worldwide.

Sabic manufactures on a global scale in Saudi Arabia, the Americas, Europe and Asia Pacific.

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 fertilisers. The Saudi Arabian Government owns 70 per cent of Sabic shares with the remaining 30 per cent held by private investors in Saudi Arabia and other Gulf Cooperation Council countries.

Shell Chemicals has been a leading player in the manufacture and sale of bulk petrochemicals to large industrial customers for more than 80 years. It has world-class manufacturing plants in major markets around the world and a robust product portfolio underpinned by strong technical heritage and market-leading proprietary technologies, innovation and excellent customer relationships. For two consecutive years since 2011, Shell Chemicals has been ranked the world’s sixth largest petrochemical company based on turnover. In 2011, it sold more than 18 million tonnes of product and achieved record earnings of over $2 billion.

Owned jointly by Shell Chemicals Arabia and Saudi Basic Industries Corporation (Sabic), Sadaf is one of the oldest petrochemicals ventures in Saudi Arabia. The 50:50 JV was established in 1980 and began operating in 1984.