On November 19, 2008, Saudi Basic Industries Corp. announced that representatives of SABIC and ExxonMobil had signed a Heads of Agreement (HOA) and are conducting detailed studies for a new Elastomers project at existing petrochemical joint ventures Kemya (based in Jubail, Saudi Arabia) and Yanpet (based in Yanbu, Saudi Arabia).
The HOA defines the principal terms for the proposed multibillion dollar project, including the project’s scope, technology, marketing and feedstock supply. The project would establish a domestic supply of over 400 KTA of carbon black, rubber and thermoplastic specialty polymers (EPDM, TPO, Butyl, SBR/PBR) to serve emerging local and international markets. This project is being undertaken as part of Saudi Arabia’s National Industrial Cluster Development Program, which is responsible for accelerating growth and diversification of the manufacturing sector, including the automotive manufacturing industry.
The final decision to implement the project, which will require Board of Director approval for both joint ventures, is subject to the completion of more detailed studies of economic feasibility and the completion of all other statutory procedures.
The new Elastomers project would utilize additional feedstock allocated by Saudi Arabia’s Ministry of Petroleum & Mineral Resources, as well as additional feedstocks from other sources in the country that would be processed at Yanpet and Kemya.