THE HAGUE, NETHERLANDS: Royal Dutch Shell plc and Sabic have signed an agreement whereby Sabic will acquire Shell’s 50 percent share in the petrochemicals Sadaf joint venture, located in Jubail, Kingdom of Saudi Arabia for $820 million.
The Sadaf joint venture (JV) encompasses six world-scale petrochemical plants with a total output of more than 4 million metric tonne per year. This announcement marks an early termination of the JV agreement which was due to expire in 2020.
Sadaf is a 50:50 joint venture between Saudi Basic Industries Corporation (Sabic) and Pecten Arabian Company Ltd, a subsidiary of Shell Oil Company (US).
This acquisition will enable Sabic to further enhance operations at Sadaf and further invest in the facilities, integrating them with Sabic’s other affiliates. This step will allow Shell to focus its downstream activities and make selective investments to support the growth of its global chemicals business.
“Our partnership with Sabic, spanning more than thirty years, has been a great success story. We’re proud to have established together one of the first petrochemical ventures in Saudi Arabia - it has grown substantially since the start, in 1986. We will continue to explore potential future opportunities with Sabic,” said Graham van’t Hoff, executive vice president chemicals, Shell.
“Since Sabic’s early days, we have enjoyed a strong relationship with Shell Chemicals. We are confident that our journey of partnership together will continue and grow in strength. With this transaction Sabic is looking to capitalise on synergy opportunities of Sadaf with other affiliates, and improve its operation and profitability,” added Yousef Al-Benyan, vice chairman and CEO, Sabic.
Read More: Shell to sell stake in Sadaf Chemicals JV for $820 million
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