The two biggest companies in Saudi Arabia have reached an agreement to jointly embark on an oil-to-chemicals project valued at $20 billion.
According to Bloomberg, Saudi Aramco and Saudi Basic Industries Corp (SABIC) plan to build a processing plant that will convert 400,000 barrels of oil a day into high-value chemicals used in plastics and base oils.
The project is slated for completion by 2025 and is part of a wider push in the country to diversify the economy away from crude oil.
The companies estimate that the project will create 30,000 direct and indirect jobs. They anticipate that the facility will crank out 9 million tons of chemicals every year. Construction is slated for the fourth quarter of 2019.
Reuters reports that SABIC, the biggest petrochemicals company in the Middle East, also has big plans to expand its reach and is hoping to spend $3-$10 billion in acquisitions over the next five years. The company is looking specifically at acquiring agri-nutrients and specialty chemicals companies. SABIC is also in talks with ExxonMobil about an investment in a cracker in Texas and plans to make a final decision by the end of next year.
