Sadara Signs Jubail Land Lease Agreement

The Sadara Chemical Company and the Royal Commission for Jubail have signed Nov. 13 a land lease agreement for building a world-class integrated chemicals complex in Jubail Industrial City 2.

The signing ceremony took place in Jubail in the presence of HH Prince Saud bin Abdullah bin Thunayan Al-Saud, chairman of the Royal Commission for Jubail and Yanbu’, and Saudi Aramco CEO and president Khalid A. Al-Falih, as well as a number of officials from Saudi Aramco and the Royal Commission.

Ziad S. Al-Labban, Sadara CEO, and HE Dr. Mosleh H. Al-Otaibi, CEO of the Jubail Royal Commission, were the signatories to the agreement.

Sadara is a joint venture between Saudi Aramco and The Dow Chemical Co. Once complete, the new joint venture complex will be one of the world’s largest integrated chemical facilities, and the largest ever built in a single phase. First production units are expected to come on line in the first half of 2015. All units are expected to be operational in 2016.

Sadara is expected to generate thousands of direct and indirect job opportunities for the Kingdom and deliver annual revenues of about $10 billion within a few years of operation.

After the ceremony, Prince Saud, accompanied by Al-Falih and other Saudi Aramco executives, were taken to Jubail Industrial City 2, where he was shown the work site for the Sadara complex.

The prince was told the complex will cover an area of 6 square kilometers and contain 26 world-scale integrated units that will be built by 15 local and international engineering firms.

He also learned that 7,000 workers are already on the site and that their number is set to peak at 60,000. Sadara has already begun hiring more than 1,000 Saudis, and about 2,500 employees will be hired over the next three years in preparation for commissioning the facilities.

The manufacturing units at the complex will produce a wide range of performance products such as polyurethanes (isocyanates, polyether polyols), propylene glycol, elastomers, linear low-density polyethylene (LLDPE), low-density polyethylene (LDPE), glycol ethers and amines.

Sadara will market products within a regional zone consisting of Middle Eastern countries, including the Kingdom. Dow will leverage its global marketing presence and know-how to market and sell on behalf of Sadara to the rest of the world.

Next stop was the Saudi Aramco Total Refining and Petrochemical Company (SATORP) complex, a joint venture between Saudi Aramco and France’s Total, which is also located in Jubail Industrial City 2.

Once completed, the 400,000 barrel-per-day full-conversion refinery with integrated petrochemical processing will be one of the most complex refineries in the world. It will be the first producer of paraxylene in the Kingdom. SATORP has already hired 729 employees and has 350 apprentices in training at Saudi Aramco facilities and refineries.

After completing specialized training at the French Institute of Petroleum and at Total refineries, the first group of young engineers has returned to the SATORP facilities to assist with the start-up. A second group has been recruited and begun similar training.

When completed, the refinery will process Arabian Heavy crude. Its products will fulfill the most stringent specifications to meet rising demand for environmentally friendly fuels.

The full-conversion refinery will maximize production of diesel and jet fuels and will also produce 700,000 metric tons per year (t/y) of paraxylene, 140,000 t/y of benzene and 200,000 t/y of polymer-grade propylene. The refinery will be fully operational by the third quarter of 2013.

Commenting on the tours and the signing, Al-Falih said: “We thank His Highness Prince Saud bin Abdullah bin Thunayan Al-Saud, and all officials of the Royal Commission for their close support for industrial projects and for providing an optimum environment for investment in the industrial cities of Jubail and Yanbu’. We also thank His Highness for his initiative to widen the infrastructure in Jubail Industrial City, and especially in the Jubail Industrial City 2 project, which incorporates Sadara and SATORP.

“This visit is the result of the close cooperation and relationship between the Royal Commission of Jubail and Yanbu’ and Saudi Aramco. Both work to support the national economy through mega-projects that will help to provide the Kingdom with thousands of jobs, will support industry and will inevitably enhance the economic position of the Kingdom, regionally and internationally.”