Sabic to gain Shell’s 50% stake in SADAF JV for $820m
Saudi Basic Industries (Sabic) has signed a $820m agreement to acquire Shell's 50% stake in the petrochemicals SADAF joint venture (JV) in Jubail, Saudi Arabia.
Comprising six petrochemical plants with a total output of more than four million tonnes per annum, the JV manufactures products such as ethylene, crude industrial ethanol and styrene at a complex in Jubail.
The latest announcement marks an early termination of the JV agreement, which was originally due to expire in 2020.
Shell chemicals executive vice-president Graham van’t Hoff said: “Our partnership with SABIC, spanning more than 30 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.”
Following the acquisition, Sabic will be able to optimise operations at SADAF and also invest in the facilities.
The acquisition will enable Shell to focus on its downstream activities and make selective investments to support the growth of its chemicals business worldwide.
Sabic vice-chairman and CEO Yousef Al-Benyan said: "Since SABIC’s early days, we have enjoyed a strong relationship with Shell Chemicals.
"With this transaction, SABIC is looking to capitalise on synergy opportunities of SADAF with other affiliates, and improve its operation and profitability."
Subject to regulatory approval, the transaction is expected to be completed later this year and will not have any impact on Shell’s other activities in the country.
Image: Sabic’s European headquarters at Sittard. Photo: courtesy of ZanderZ.