Dow and Saudi Aramco sign agreement for Sadara Chemical Company

Saudi Aramco president and CEO Khalid Al-Falih and Dow chairman and CEO Andrew Liveris signed a joint venture shareholders’ agreement for Sadara Chemical Company.

Sadara will be comprised of 26 manufacturing units, several of which constitute “mega projects” in themselves. Once complete, the joint venture complex will be one of the world’s largest integrated chemical facilities, and the largest ever built in one single phase.

Just over 100 kilometers from where Al-Falih and Liveris signed the agreement, bulldozers, graders and rollers are proceeding with site preparations on the world-scale, mixed feed cracker, which will be integrated with Saudi Aramco’s extensive hydrocarbon infrastructure.

“Sadara is an extraordinary and unique venture that will build upon the strengths of both Dow and Saudi Aramco to deliver the diversified and specialty materials and chemicals needed to drive growth in the entire region and beyond,” said Liveris. “This premier partnership is truly unprecedented and is very well positioned to bring value creation on every front; transforming the Saudi economy, as well as the entire chemical industry, at the same time.

Sadara is expected to deliver annual revenues of approximately $10 billion within a few years of operation while contributing significantly to Saudi Arabia’s industrial diversification. The planned product portfolio will add value chains to the Kingdom’s vast natural resources and complement the existing chemical landscape. Ultimately, the joint venture will be instrumental in Saudi Arabia’s strategy to become not only a strategic chemicals and plastics producer, but also a hub for future downstream manufacturing.

“Sadara is a milestone for Saudi Aramco and a cornerstone of our transformational downstream growth strategy, which will add further value to our significant petroleum value chain,” said Al-Falih. “As the world’s largest integrated and most reliable supplier of energy and petroleum-based derivative products, our strengths complement those of Dow, the world’s foremost chemicals company with a global track record and unique suite of chemicals technology.”

Sadara’s manufacturing units will produce a wide range of performance products such as polyurethanes (isocyanates, polyether polyols), propylene oxide, propylene glycol, elastomers, linear low density polyethylene, low density polyethylene, glycol ethers and amines. Sadara will market products within a regional zone of eight countries, including Saudi Arabia. Dow will leverage its global marketing know-how to market and sell on behalf of Sadara to the rest of the world.

First production units are expected to come on line in the second half of 2015. All units are expected to be up and running in 2016.