Advanced Global Investment Company (AGIC), a subsidiary of PP producer Advanced Petrochemical, has agreed to form a joint venture with South Korea’s SK Gas and build a propane dehydrogenation (PDH)/PP complex at Jubail, Saudi Arabia.
The JV agreement follows a Memorandum of Understanding (MoU) signed in June, 2019.
The new entity, called Advanced Polyolefins, will be built at a cost of $1.8 billion and will be owned by AGIC with 85% share and SK Gas Petrochemical holding the remainder.
Advanced Polyolefins’ facility will have a nameplate capacity to manufacture 843,000 tons per year of propylene and 800,000 tons per year of polypropylene.
AGIC has also inked a license agreement with US-based Lummus Technology for the supply of CATOFIN technology and with LyondellBasell for Spheripol and Spherizone PP technologies.
According to AGIC, about 25% of the finance for the project has been secured by equity from shareholders and remaining 75% will be financed through loans by the newly formed JV.
Saudi Aramco will supply propane for the project on a long-term basis, for which it has also appointed project management consultants.
Construction is expected to start in 2021 with commercial operations scheduled by the second half of 2024.