Advanced Petchem, SK Gas to build $1.8bn PDH, PP complex in Saudi Arabia

SINGAPORE (ICIS)–Advanced Petrochemical and South Korean SK Gas Co will develop a $1.8bn or Saudi riyal (SR) 6.75bn propane dehydrogenation (PDH) and polypropylene (PP) complex in Jubail, Saudi Arabia, the Saudi producer said on Wednesday.

The project to be built at the Jubail industry city will have “a capacity to produce propylene and PP of 750,000 ton[ne]s each per annum”, Advanced Petrochemical said in a filing to the Saudi Stock Exchange.

A memorandum of understanding (MoU) on the project was signed between Advanced Global Investment Co (AGIC), a subsidiary of Advanced Petrochemical, and SK Gas, which is a subsidiary of South Korea’s SK Group.

“This project is expected to produce value added PP grades to manufacture PP compounds for the automotive industry as well as other specialized grades that are currently being imported into the Kingdom of Saudi Arabia,” Advanced Petrochemical said.

In a separate announcement, the company said it has received propane feedstock allocation from Saudi Arabia’s Ministry of Energy, Industry and Mineral Resources for the project, which is expected to start up in the second half of 2024.

The overall project, as per the allocation letter from the ministry, also includes the proposal to set up a 100,000 tonne/year PP compounding unit “to cater for the requirements of the potential automotive industry” in Saudi Arabia, Advanced Petrochemical said.

A portion of the propylene output from the PDH unit will also be utilized to set up a 70,000 tonne/year isopropanol (IPA) unit, it said.

“The approximate investment costs for the PP Compounding unit and the IPA unit are expected to be $40m and $100m, respectively,” the company said.

In a third announcement on the Saudi bourse, the company said that it also signed an MOU with SK Gas to conduct a feasibility study on a cracker project in Saudi Arabia.

Picture: A view of a petroleum processing plant in Jubail, Saudi Arabia. (Source: Str/EPA/Shutterstock)

($1 = SR3.75)