Saudi International Petrochemical Company (SIPC) and its partners in the Gulf Advanced Chemical Industries Company (GACIC) have signed joint venture, technology transfer and technical agreements with Huntsman Corporation and Kvaerner Process Technology Limited to form a new manufacturing unit for the production of petrochemicals.
The joint venture, to be located in Jubail Industrial City, will produce up to 7,000 tonnes per year (tpy) of maleic anhydride (MAH) and 50,000 tpy of butanediol (BDO) and tetrahydrofuran (THF) at a total investment of $210 million.
The agreements were signed by SIPC chairman Abdulaziz Al-Zamil, Huntsman Corporation senior vice president Thomas Fisher, and Kvaerner Process Technology president David Tomlinson.
The joint venture will use Huntsman Corporation's proprietary butane-to-maleic anhydride technology to convert n-butane supplied by Saudi Aramco to maleic anhydride.
The MAH will then be used as a feedstock for the production of BDO and THF using Kvaerner's MAH-to-BDO technology, according to an SIPC spokesman.
BDO is a chemical used in the production of thermoplastic polyurethanes, elastic fibres, pharmaceuticals, solvents, plant protection, coatings and electronic chemicals.
is used primarily in unsaturated polyester resins for the manufacture of lube oil additives, agriculture chemicals, paper sizing chemicals, artificial sweeteners, detergents and automotive body parts.
SIPC is a Saudi joint stock company with a fully paid-up capital of SR500 million ($133 million). SIPC will initially participate in the formation of three limited liability companies, in joint venture with foreign partners, to produce and market MAH and BDO, methanol and acetic acid, and vinyl acetate monomer (VAM) in Jubail, he said.
SIPC will own 50 per cent of the new MAH/BDO joint venture while the other partners will own 10 per cent each.
Huntsman Corporation is claimed to be the world's largest privately held chemical company with revenues in excess of $7 billion, employing 14,000 people. It is the world's largest producer of MAH and a leader in MAH technology and catalyst.
The project will use Huntsman's proprietary butane to maleic anhydride technology and catalyst to construct a n-butane based, fixed bed maleic anhydride plant.
Kvaerner is a Norwegian engineering and construction group with a London-based international headquarters. Group annual revenues are approximately $10 billion, with some 55,000 permanent staff located in more than 100 countries.
After the signing, Al-Zamil said: "The joint venture agreement and the agreements with our partners in the BDO project is another milestone achieved by SIPC to bring these projects to reality.
"The Kingdom of Saudi Arabia represents one of the best available locations for petrochemical enterprises. Access to low cost materials, the built-in infrastructure and government support brings unmatchable economical advantages," he added.
"This joint venture demonstrates Huntsman's commitment to remain the leading global player in maleic anhydride production, technology and catalyst. We are pleased to have been chosen for this important project. This represents the sixth consecutive maleic anhydride plant in the world to use our technology and catalyst," said Fisher.
Tomlinson said: "This project is the sixth plant to use Kvaerner's butane-based BDO technology, bringing the total licensed capacity to 250,000 tpy. We have always considered Saudi Arabia as an ideal location and have been greatly impressed by the commitment of GACIC and its shareholders to this project. It will be a real pleasure to work with them through the course of this venture."
Dr Abdulaziz Al-Gwaiz, SIPC board member and chairman of the new project, said the MAH/BDO plant will be located within SIPC's complex in Jubail, where engineering has already started and plant start-up is expected in the third quarter of 2003.
SIPC has signed a contract with Fluor Daniel for the overall management of the plant.
