Sino Saudi Aramco Company Ltd, a wholly owned subsidiary of Saudi Aramco, signed a mutual cooperation agreement with SABIC Shenzhen Trading Company Ltd, a SABIC subsidiary in the People's Republic of China.
The agreement was signed on the afternoon of Saturday, 9 Rajab 1429 (July 12, 2008) at the offices of the parent company, Saudi Aramco, in Dhahran. Under this agreement, SABIC Shenzhen Trading Company Ltd will market Saudi Aramco Sino Company Ltd's twenty five percent share of polyolefin products produced by the Fujian Refining and Petrochemicals Company of the Peoples Republic of China.
The agreement was signed on behalf of Saudi Aramco Sino Company Ltd., by Saudi Aramco's SR Vice President, Refining, Marketing and International Operations, Khalid G. Buainain, while signing on behalf of SABIC Shenzhen Trading Company Ltd was SABIC's Vice President, Corporate Finance, Eng. Mutlaq Al-Morished.
The signing ceremony was attended by Saudi Aramco President and CEO, Abdallah S. Jum'ah, by Mohamed Al-Mady, SABIC's Vice Chairman of the Board of Directors and Chief Executive Officer, in addition to a number of senior officials of Saudi Aramco, SABIC and Saudi Aramco Sino Company Ltd.
Mr. Jum'ah remarked, "Last year, we celebrated with SINOPEC, the government of Fujian district of China, and ExxonMobil, the official inauguration of our joint processing venture in Fujian, the 'Fujian Refining and Petrochemicals Company Ltd,' which is considered to be the first ever refining and petrochemical industries integrated project to be established with a foreign company in China, and here we are today ready to harvest the fruit of this new investment with our partners, through this momentous step we are taking together with SABIC."
Jum'ah added, "In itself, this agreement constitutes, from the Kingdom's perspective, an extra relative advantage for SABIC, which grants it the right to market polyolefins in support of Saudi investments abroad.' Jum'ah concluded his statement by saying, 'We believe this cooperation between Saudi Aramco and SABIC will, in the future, add value to the Kingdom's internal and external investments."
In turn, SABIC's Vice Chairman and CEO, Eng. Mohamed Al-Mady said, "The agreement signed between Saudi Aramco and SABIC is a qualitative leap in the history of Saudi industrial development. The agreement incarnates the integration between two giants each occupying a pioneering position worldwide, the first in the field of oil industries and the other in the area of the petrochemical industry."
He added, "I look forward to this agreement to serve as a launching pad for more extensive strategic cooperation between the two companies. SABIC has anchored its success over the years on its close cooperation with Saudi Aramco. We are looking forward to promoting this cooperation to include various industrial, marketing and technological aspects in a way that will accelerate national industrial development and maximize the gross domestic product."
Khalid G. Buainain explained that the marketing studies, conducted by Sino Saudi Aramco Company Ltd, showed that the distribution and marketing of the polyolefins production of Fujian Refining and Petrochemicals Company would cover a large base of customers inside China. The two parties agreed that this task should be undertaken by SABIC through a polyolefins marketing agreement, on account of SABIC's local and foreign experience in petrochemical marketing.
He added, This agreement will underscore the depth of the cooperation between Saudi Aramco and SABIC to maximize the benefit of their investment projects in the best interest of the Saudi economy. Saudi Aramco's share in the products to be marketed by SABIC will amount to 320,000 tons annually, representing 25% of the total production of the joint venture in China. Implementation of the agreement is expected to start with the commercial startup of the project in the second quarter of 2009.
This agreement is regarded as one of the significant pillars in the progress of the strategic partnership between SABIC and Saudi Aramco, and the agreement is expected to boost and support the strong leading position of SABIC in the field of production and marketing of polyolefins, worldwide.
Through its representative, Saudi Aramco Sino Company Ltd, Saudi Aramco holds a 25% interest in the refining and petrochemical joint venture along with Fujian Petrochemicals Company of China, a subsidiary of Sinopec Corporation and the Fujian Government, which owns a 50% stake, while ExxonMobil owns 25% through a subsidiary.
The project's products will include such polyolefins as linear low density polyethylene (LLDPE), at a production capability of 400,000 tons annually, high density polyethylene (HDPE), at a production capacity of 400,000 tons annually. The project will also produce polypropylene (PP), at a production capacity of 470,000 tons annually.
