Formation of Dow and Saudi Aramco Proposed Joint Venture Making
“Sadara” will further strengthen Dow’s high-growth, technology-differentiated value chains
NEW YORK--(BUSINESS WIRE)--The establishment of Sadara Chemical Company, a planned joint venture under formation between The Dow Chemical Company (NYSE: DOW) and the Saudi Arabian Oil Company (Saudi Aramco), is making significant progress following the authorization by the Boards of Directors of both companies in late July.
The two partners are in the final stages of establishing Sadara, and it is expected that the officer and board member nominees will soon be officially announced. The on-line recruitment process for the first in-take of Saudi apprentices commenced in August and the response was overwhelming, with over 6,300 applications received.
Meanwhile, the Engineering, Procurement & Construction (EPC) contract bidding process continues. 50% of the capital investment amount is already under contract with another 20% out for bid. It is expected that all invitation for bids will be out by end of the year.
“We are pleased with the progress that we have made so far,” said Jim McIlvenny, Dow’s Group Senior Vice President for Mega Projects. “Both Dow and Saudi Aramco are excited at the benefits that this historic partnership is going to bring and we are committed to making Sadara a reality. We certainly look forward to realizing the extraordinary potential that Sadara holds.”
The authorization for Sadara came after an extensive project feasibility study and front-end engineering and design effort which began in 2007. Sadara will build and operate a world-scale, fully integrated chemicals complex in Jubail Industrial City, Kingdom of Saudi Arabia. Comprising 26 manufacturing units, building on Saudi Aramco’s project management and execution expertise, and utilizing many of Dow’s industry leading technologies, the complex will be one of the world’s largest integrated chemical facilities, and the largest ever built in one single phase.
Sadara will capitalize on an advantaged cost position to create a manufacturing hub providing a differentiated product slate of over 3 million metric tons of value-added performance plastics and chemical products such as Polyurethanes (isocyanates, polyether polyols), Propylene Oxide, Propylene Glycol, Elastomers, Linear Low Density Polyethylene, Low Density Polyethylene, Glycol Ethers and Amines to supply rapidly growing markets in energy, transportation, infrastructure and consumer products. The complex will possess flexible cracking capabilities for a range of feedstocks - to be supplied by Saudi Aramco’s extensive integrated hydrocarbon infrastructure.
Site preparation has already commenced and the first production units are expected to come on line in the second half of 2015, with all units expected to be up and running in 2016. Once operational, Sadara is expected to deliver annual revenues of approximately $10 billion within a few years of operation and generate thousands of direct and indirect employment opportunities through the complex and integrated value parks. Total investment for the project, including third party investments, will be approximately $20 billion.
About The Dow Chemical Company
Dow combines the power of science and technology with the “Human Element” to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world’s most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow’s diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2010, Dow had annual sales of $53.7 billion and employed approximately 50,000 people worldwide. The Company’s more than 5,000 products are manufactured at 188 sites in 35 countries across the globe. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com.
About Saudi Aramco
Owned by the Saudi Arabian Government, Saudi Aramco is a fully-integrated, global petroleum enterprise, and a world leader in exploration and producing, refining, distribution, shipping and marketing. The company manages proven reserves of 260.1 billion barrels of oil and manages the fourth-largest gas reserves in the world, 279 trillion cubic feet. In addition to its headquarters in Dhahran, Saudi Arabia, Saudi Aramco has affiliates, joint ventures and subsidiary offices in China, India, Japan, the Netherlands, the Republic of Korea, Singapore, the United Arab Emirates, the United Kingdom and the United States. For more information, go to www.saudiaramco.com.
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