The Saudi Arabia General Investment Authority (SAGIA) has issued licences for two petrochemical plants to be set up in Jubail. They will require initial investment of about SR 1,077 million ($287 million).

The projects will have a nameplate capacity of 120,000 tonnes a year (t/y) of normal paraffin (N-paraffin) and 100,000 t/y of linear alkyl benzene (LAB).

They are scheduled to start production in mid-2003. N-paraffin and LAB are intermediate chemicals to produce detergents. The products will be sold in the Middle East and on global markets.

The N-paraffin and LAB projects will cost SR 570 million ($152 million) and SR 507 million ($135 million) respectively.

They will be developed as joint ventures by the Saudi Offset Limited Partnership (SOLP), part of the Saudi economic offset programme, and Tamilnadu Petroproducts (TP), part of India’s Southern Petrochemical Industries Corporation. A number of Saudi investors have entered into negotiations for participation in the projects.

SOLP and TP will invest up to 60 per cent of the project’s cost. The remainder is likely to be funded by Saudi investors, who may join as partners, industry sources say.

Memoranda of understanding for the projects were signed in early 1998, followed by a series of feasibility studies, the last of which was completed recently.

Riyadh-based DevCorp International has been appointed by SOLP as the managing partner for the development of the projects.