SABIC and SIPCHEM Sign MOU For New Projects

Jubail, Saudi Arabia, May 10, SPA -- The Saudi Basic Industries
Corporation (SABIC) and the Saudi International Petrochemical Company
(SIPCHEM) announced yesterday that they have signed a Memorandum of
Understanding (MOU) for mutual cooperation in the setting up of new
projects in Jubail.

The two companies will use the existing surplus production
capacities to utilize The Petroleum and Mineral Resources Ministry's
allocated raw materials to produce a number of specialty
petrochemical products, according to a press release of SABIC issued
on Sunday.


Under this MOU, SABIC will implement several new petrochemical
projects in the Kingdom of Saudi Arabia at a preliminary estimated
value of SR 12 billion (US$ 3,2 billion).


This is comprised of seven plants for the production of 250,000 tons
of methyl metha acrylate (MMA); 30,000 tons of poly methyl metha
acrylate (PMMA); 200,000 tons of acrylonitrile; 50,000 tons of
polyacrylonitrile; 50,000 tons of polyacetyl resins, 3,000 tons of
carbon fiber and 40,000 tons of sodium cyanide annually.


SIPCHEM will build two plants at a preliminary estimated cost of SR
3 billion (US$ 810 million) for the production of 125,000 tons of
poly vinyl acetate and 200,000 tons of ethylene vinyl acetate
annually. These plants are expected to go on-stream by mid 2013.


According to the MOU, a SABIC manufacturing affiliate will crack the
feedstock allocated to SIPCHEM and also provide it with ethylene. One
of Sipchem’s manufacturing companies will supply carbon monoxide to
SABIC for the production of MMA.


The two companies will move forward on these projects after the
completion of economic studies and legal procedures. Studies on the
appropriate technology required for these projects are currently
under way.


As these industries are largely research-dependant, SABIC and
SIPCHEM will establish specialized R&D (Research and Development)
centers to develop product applications. Their aim will be to promote
and encourage local industries, especially in the areas of automotive
parts, electrical appliances, household commodities, computers and
electronic equipment and health care and provide support to national
downstream industries, especially the plastic industries sector.


The MoU was signed by Mutlaq H. Al-Morished, SABIC Vice President,
Corporate Finance, and Ahmad Al-Ohali, SIPCHEM CEO, the press release
disclosed.

--SPA