Page 19 - DMEA Week 13 2021

DMEA PETROCHEMICALS DMEA

Aramco and Dow restructure

Sadara debt, allocate more gas

MIDDLE EAST SAUDI Aramco and Dow Chemical of the US “The transition will begin in mid-2021 and grad-
have reached a debt restructuring agreement for ually increase over the next five years. An agree-
their Sadara Chemical Co. joint venture (JV) in ment will be entered into as to the specifications
the Kingdom while allocating more gas to the of the products to be marketed.”
plant. It added: “Sadara will also benefit from
Under the deal, the companies will guaran- longer-term structural operating and feedstock
tee up to an aggregate of $3.7bn of senior debt improvements, further enhancing its crackers’
proportionate to their shareholding. Aramco flexibility and improving Sadara’s position on
owns a 65% stake in Sadara, with Dow holding the global cost curve.”
the remainder. The JV partners will also benefit Neither of the partners disclosed the volume
from a repayment grace period that runs until of additional gas allocated to the facility; how-
June 2026 and the deal also extends the final ever, it follows the sign-off by the Ministry of
maturity date from 2029 to 2038. Energy earlier this month for feedstock to be
The JV operates a $20bn plant in Jubail Indus- provided to the local Advanced Petrochemical
trial City in the oil-rich Eastern Province, capa- Co. for its new 2.4mn tpy plastics and aromatics
ble of producing 3mn tonnes per year (tpy) of a plant at Jubail Industrial City 2.
slate of 26 chemicals, and is home to Saudi Ara-
bia’s first mixed-feedstock cracker. Commercial Maintenance
operations began in 2017. Last week, Sadara began unplanned mainte-
Also pursuant to the deal, Sadara will cease nance at the plant’s 1.5mn tpy ethylene cracker
marketing its own products, with Aramco and and the 400,000 tpy propylene cracker. Argus
Dow taking direct responsibility for market- quoted anonymous sources as saying that issues
ing Sadara products later this year, again pro- had arisen from the compressor.
portionate to their shareholding in the JV. At It added that output from the 375,000 tpy low
present, Sadara is responsible for marketing linear density polyethylene (LLDPE)/high den-
products throughout the Middle East, while sity polyethylene (HDPE) units and the 220,000
Dow takes responsibility for marketing in all tpy LDPE unit was expected to be effected by the
other countries. maintenance, but this has yet to be confirmed by
In its Securities Exchange filing, Dow said: Sadara.™

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