Sadara ... well positioned to increase revenue

Sadara and Veolia Middle East have signed an agreement for the construction and operation of a sustainable industrial waste to energy facility in PlasChem Park


The Sadara joint venture is expected to provide over $1.5 billion in incremental revenue to DowDuPont in 2018 versus 2017, and about $200 million in additional earnings before interest, tax, depreciation and amortisation (EBITDA), its chief financial officer said.

In 2017, Sadara brought all its 26 units online and has already made significant sales of polyethylene (PE), ethylene oxide (EO) derivatives, and methyl di-p phenylene isocyanate (MDI), with toluene di-isocyanate (TDI) sales just starting, said Howard Ungerleider, chief financial officer of DowDuPont, on the company’s Q4 earnings conference call.

"Sadara is well positioned to meet the strong consumer-led growth drivers in the emerging regions of Asia, Eastern Europe, India and Africa," said Ungerleider.

In the long term, DowDuPont expects an average annual contribution of about $400 million in EBITDA from Sadara over the cycle, he noted.

Sadara, meanwhile, has signed a temporary agreement with Saudi Aramco to supply its subsidiary Sadara Basic Services Company with feedstock.

Sadara uses ethane, dry gas, naphtha, and other refinery liquids from Aramco and third parties to produce its products at the Sadara chemical complex located in Jubail Industrial City II, according to a statement to the Saudi Stock Exchange (Tadawul).

Under the deal, Aramco, the world’s largest oil producer, will provide Sadara with natural gas feedstock, up to the maximum volume on a daily basis.

The quantity of naphtha feedstock which Sadara is entitled to nominate and purchase under the Naphtha Feedstock Supply Agreement shall be reduced by an amount equal to the quantity of NG that Sadara nominates under the NG Feedstock Supply Agreement, subject to a conversion factor," the statement added.

Sadara Basic Services Company is indirectly 100 per cent subsidiary of Sadara Chemical Company (Sadara).

Meanwhile, Sadara and Veolia Middle East have signed an agreement for the construction and operation of a sustainable industrial waste to energy facility in PlasChem Park.

Under the design-build-own-operate model, the energy facility will be developed by Veolia and under the agreement rules, Veolia will treat identified Sadara industrial waste streams and recover energy to provide steam, cooling and instrument air to the industrial park, among others.

During the agreement signing, Sébastien Chauvin, CEO of Veolia Middle East said: "This project is a key milestone for the development of Veolia in the Kingdom of Saudi Arabia and the journey towards a circular economy."

He mentioned that the development of the Industrial Waste to Energy facility by Veolia is a game changer for the Jubail chemical industry by providing a local, competitive, sustainable and reliable solution for industrial waste management as well as industrial utility supply for PlasChem Park.

"The long-term partnership with Sadara is paving our ‘industrial symbiosis’ path, a model in which resources and energy are recycled and recovered, and it will bring the most advanced technologies to support the growth of PlasChem Park," he added.

Dr Al-Faqeer said: "Since its inception, Sadara has been billed as an enabler of the kingdom’s downstream manufacturing industry, based on our diversified product portfolio and the varied end-use manufacturing opportunities they enable."

"Part of this offering is the ability to lower the capital footprint required for investors and potential investors to set up their facilities in PlasChem Park, and this agreement is a huge step forward for those investors who have already broken ground, or who will soon be breaking ground in the Park," he stated.

The agreement follows an MoU signed by Sadara and Veolia earlier this year and solidifies plans to provide long-term waste management solutions for Sadara.