INEOS to invest US$2bn in Saudi Arabia plants

Jubail 2 DevelopmentUK energy firm INEOS has signed a memorandum of understanding with Saudi Aramco and Total, France, to build three new plants as part of the Jubail 2 complex in Saudi Arabia

A new state-of-the-art 425000-tonne acrylonitrile plant will use INEOS’ technology and will be the first plant of its kind in the Middle East when it starts up 2025.

INEOS will also build a 400000-tonne LinearAlphaOlefin (LAO) plant and associated world-scale PolyAlphaOlefin (PAO). These units will be the most energy efficient in the world when they begin production in 2025.

Jim Ratcliffe, Chairman of INEOS, said, “This is a major milestone for INEOS that marks our first investment in the Middle East. The timing is right for us to enter this significant agreement in Saudi Arabia with Saudi Aramco and Total. We are bringing advanced downstream technology which will add value and create further jobs in the kingdom.”

Commenting on the news, Wood Mackenzie Chemicals Principal Analyst, Patrick Kirby, added, “INEOS’ business is primarily centred in Europe and the US currently, so this represents a geographical diversification for the company.

“The new investments will be integrated with the Saudi Aramco and Total JV mixed-feedstock steam cracker complex that is expected to be 1.5mn tonnes in size. This will allow for a much wider portfolio of derivatives than previous ethane cracker investments in Saudi Arabia.

“Mixed-feedstock steam cracking and closer integration of refining and chemical operations in Saudi Arabia represents a wider trend developing in the Middle East and the Asia Pacific, as major oil company's look to gain further exposure to the petrochemical industry as transportation fuels are set to decline.”

The project represents a continuation of INEOS’ growth strategy following the announcement of US$3.3bn investment into a new plant at Antwerp, US$1.2bn investment across the UK, acquisitions in China and capacity increases in the US Gulf Coast, Alabama and Chocolate Bayou facilities.

Paul Overment, CEO INEOS Nitriles, stated, “Global demand for acrylonitrile continues to grow ahead of GDP, to meet the demand for lighter, stronger, energy efficient materials such as ABS, composites and carbon fibre. This first investment in the Middle East consolidates our position as the market leader and shows a clear and ongoing commitment to meet our customers’ needs wherever they are in the world.”

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