Page 5 - DMEA Week 13 2022
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DMEA COMMENTARY DMEA
Jubail at night
created by the time the hub opens in late 2022. The 12-sq km facility is being developed
The move follows the announcement by in Jubail Industrial City II by Aramco’s Sadara
Riyadh in February that companies must relo- Chemical JV with US-based Dow Chemical,
cate their regional headquarters to Saudi Arabia in co-ordination with the government’s Royal
by January 1, 2024 if they want to continue hav- Commission for Jubail and Yanbu, alongside
ing access to government contracts. Sadara’s 26-plant, integrated complex which
An official source told the Saudi Press Agency was built at a cost of around $20bn and produces
at the time that once the policy is implemented, more than 3mn tonnes per year (tpy) of special-
Riyadh will cease contracting with companies ity chemicals.
primarily based elsewhere in the region, with the In September, Sadara completed an ethylene
legislation applying to those working with Saudi oxide/propylene oxide (EO/PO) pipeline and
agencies, institutions and government-owned distribution centre to provide feedstock to other
funds. facilities in PlasChem. The EO and PO pipelines
With many energy companies having built a are 6.8 km and 6.2 km in length respectively, and
Gulf base in the UAE, the move will represent a terminate at the PlasChem Park Oxide Distribu-
clear challenge to the Emirates’ domination of tion Facility.
foreign direct investment (FDI) as the Kingdom
seeks to knock it the from top spot. Results
That being said, Saudi Aramco already Both SABIC and Sadara – like Aramco – have
requires strict compliance with local content announced much-improved financial perfor-
from all foreign partners and the company is mance in their full-year results.
building out the King Salman Global Maritime Sadara’s sales rose by 67.7% during 2021 to
Industries Complex at Ras Al Khair and as well $4.69bn, resulting in net profits of $830mn on
as SPARK, all in Eastern Province, where joint the back of improved global economic perfor-
ventures are being developed to promote local mance and increased demand for speciality
energy services and innovation. chemicals.
The former facility, located up the coast from SABIC’s recovery was even more pro-
Jubail, will include units for rig and shipbuild- nounced, with sales rising by 50% to $46.6bn
ing with partners including Hyundai, Lamprell, and net profit climbing from a measly $20mn
McDermott and the national shipping firm in 2020 to $6.15bn last year, “principally driven
Bahri. by the improved products margins and increase
in the share of results from associates and JVs”,
PlasChem gas according to the company.
Jubail is the focus of another deal agreed this With oil prices remaining buoyant, Aramco
week, with the local Gas Arabian Services will be expecting its subsidiaries’ performance to
(GAS) awarded a $20mn contract to supply continue in such fine health, and Saudi invest-
and construct a gas distribution network for the ments to build out the chemicals sector will sup-
PlasChem Park. port this.
Week 13 31•March•2022 www. NEWSBASE .com P5
