Saudi Aramco and Saudi Basic Industries Corporation (Sabic) are planning a petrochemicals joint venture at Yanbu on the west coast of the kingdom.

A feasibility study is being conducted for the proposed plant next to Aramco’s existing Yanbu Refinery, which is due to undergo rehabilitation as part of the oil giant’s clean fuels scheme.

“When a refinery undergoes clean fuels rehabilitation you usually get some new streams of feedstock so it makes sense to put a plant there to take advantage of this,” says an oil industry source based in Saudi Arabia. “So the feasibility study is determining what will be the best for for the site.”

No definite timeline or decision regarding what products will be produced have been yet made and it is likely that this will not be decided until the feasibility study is concluded.

The project could mirror Aramco’s Ras Tanura Refinery Clean Fuels and Aromatics Project in the Eastern Province. The US’ Jacobs Engineering has been awarded the front-end engineering and design (feed) for that project in a deal worth around 400,000 man hours (MEED 9:9:11).

The joint venture is backed by both the Aramco and Sabic upper management and highlights a desire for the companies to work together on projects in the Middle East. Prior to this project, only marketing deals have been signed between the companies where Sabic have agreed to sell offtake from an Aramco plant in China.

Aramco is establishing a reputation as a major petrochemicals producer with a number of high-profile projects in the kingdom that involve joint ventures with major international chemical companies. These include the PetroRabigh project with Japan’s Sumitomo Chemical on the west coast of the kingdom and the Sadara Chemical Company, which is a joint venture with the US’ Dow Chemical.

Sabic is the world’s second largest diversified chemical company. It is 70 per cent owned by the Saudi Arabian government, with the remaining 30 per cent of its shares traded on the Riyadh stock exchange.