SABIC to develop $6.4bn project in China; Aramco’s unit related party

SAUDI ARAMCO
2222 -4.37% 31.70 -1.45 Default Company
2010.O 0.00% 0.00 0.00 Default Company
7204.B 0.00% 0.00 0.00

Riyadh – Mubasher: Saudi Basic Industries Corporation (SABIC) unveiled plans to build a world-scale Petrochemical complex in southeastern China at an estimated value of $6.40 billion, according to a bourse filing.

Located in the Fujian province, the complex will consist of a mixed feed steam cracker with an expected annual ethylene maximum capacity of up to 1.80 million tonnes and downstream facilities including Ethylene Glycols (EG), polyethylene (PE), polypropylene (PP), polycarbonate (PC), and several other units using advanced technologies.

The listed firm’s subsidiary SABIC Industrial Investment Company holds an ownership of 51% of the project, while Fujian Fuhua Gulei Petrochemical Company Limited owns the remaining 49% stake.

The construction of the facility is expected to begin during the first half (H1) of 2024. Meanwhile, the preparation for commissioning and start-up will begin from H2-26 and will last for six months.

SABIC underlined that the project will reflect on its financial results after the commercial production, indicating that the completion process will take place during H1-27.

Additionally, the project aligns with SABIC’s objectives to diversify its feedstock sources and widen its manufacturing presence across Asia as a key market for a wide range of products.

SABIC will finance the project through debt in addition to the company's cash flows.

It is worth noting that Aramco Trading Company is a related party, which is a fully-owned entity by Saudi Arabian Oil Company (Aramco) that owns 70% of SABIC through one of its subsidiaries.

In the first nine months (9M) 2023, SABIC turned to net losses after Zakat and tax worth SAR 1.04 billion, against net profits of SAR 16.24 billion in the January-September 2022 period. 

Source: Mubasher Source: {{details.article.source}}