Saudi Arabia is no stranger to massive petrochemicals projects, but the oil-to-chemicals complex being planned by Sabic would dwarf anything ever attempted before. This would apply not just to the kingdom, but anywhere in the world.
The project is epic in its proportions and if it does go ahead, it will have a budget that conservative estimates have pegged at $30bn, but which in reality could be more like $50bn.
The scheme would certainly allow Sabic to reinforce its position as the regions only truly global superpower in the petrochemicals sector, but whether it is something the firm could manage to finance alone is one of the questions now being asked.
There is no question that oil-to-chemicals sounds like the perfect megaproject for both Sabic and oil major Saudi Aramco to execute together. The expertise of both companies in their respective fields means they would be able to form a 50:50 partnership that would almost guarantee the success of the plans.
Aramco and Sabic not working together already may seem unusual to outsiders, but the fact is, historically, the two companies have been pursuing different goals and therefore have not been able to find a project that would suit both parties.
There has been no indication from Sabic that Aramco will be involved and as it stands, the 200,000 barrel-a-day (b/d) plant will be executed alone.
If this scheme is successful, there is no reason why oil-to-chemicals plants cannot proliferate across the region. With oil prices looking like they are moving downwards, caused mainly by oversupply, a fully diversified value chain is looking more like a sensible strategy for all of the regions major oil producers.