State-owned Saudi Aramco and Saudi Basic Industries Corp (SABIC) awarded KBR an engineering contract for their joint crude oil to chemicals project worth over US$20bn
Under the contract, KBR will finalise project scope, select technology providers, update project economics and perform front-end engineering and design.
“We are effectively moving forward with the implementation of our strategies and plans towards further integration and value creation. The award of this second project management contract to KBR not only strengthens the project with additional world-class experience, but is yet another milestone in the Kingdom’s continuous drive to redirect and optimize its abundant natural resources and maximize its chemicals yield. With the addition of KBR to the project, Saudi Aramco and SABIC are confident that the right parties are now in place to see the project through its initial phases and the inclusion of a high proportion of local content,” Saudi Aramco CEO Amin Nasser said.
Saudi Arabia, which has long relied on oil revenues, saw its economy come under strain when oil prices dipped to multi-year lows.
The drop in prices prompted the government to diversify its economy away from oil, cut spending, introduce taxes and encourage private growth to create more jobs.
The government is also looking to list a part of oil giant Aramco and build more downstream assets in a bid to raise cash and lessen its dependence on oil prices.
“This contract award to KBR is a major advance by the two leading industrial companies in Saudi Arabia – SABIC and Saudi Aramco – towards establishing a large petrochemical facility in support of Saudi Arabia’s vision of creating job opportunities, initiating new industrial technologies, and diversifying the product portfolio. The acceleration of the project’s milestones signifies the determination of the joint venture partners to achieve the project objectives along with Saudi Arabia’s vision of economic diversification, to which this project is a significant contributor,” Yousef Al-Benyan, CEO, SABIC said.
In November last year, the companies signed a MoU to develop the complex, which is expected to process 400,000bpd of crude oil and produce about 9mmt of chemicals and base oils annually.
The complex is expected to begin operations in 2025.
