Ineos to Invest $2 Billion in Saudi Arabia
In its first foray into the Middle East, Ineos has signed a Memorandum of Understanding with Saudi Aramco and French energy and chemicals group Total to build three new plants in Saudi Arabia’s Jubail 2 complex.
The Swiss-headquartered petrochemicals group is investing in the $5 billion Saudi-French Amiral project, which will be an integral part of Jubail 2 and produce downstream oil derivatives and speciality chemicals worth $4 billion.
Ineos said its three world-scale plants in the complex, all scheduled to go on stream in 2025, will produce the key building blocks for carbon fiber, engineering polymers and synthetic lubricants that are “pivotal to economic growth in the region.”
The facilities will encompass a 425,000 t/y acrylonitrile plant using Ineos’ technology and catalyst. The group claims this will be the first of its kind in the Middle East.
Also part of the investment are a 400,000 t/y LinearAlphaOlefin (LAO) plant and associated world-scale PolyAlphaOlefin (PAO). According to Ineos, these units will be “the most energy efficient in the world on start-up.”
Building the plants in Saudi Arabia, the chemical producer noted, will give Ineos access to competitive raw materials and energy, “to better serve customers directly in the Middle East and markets across Asia.”
Chairman Jim Ratcliffe called the deal with Aramco and Totall “a major milestone for Ineos.” He said the timing is right to invest in the Middle East and bring advanced downstream technology that will add value and create further jobs in The Kingdom.”
Ratcliffe said the project represents a continuation of Ineos’ growth strategy following the announcement of €3 billion investment in a new plant at Antwerp, Belgium, a £1 billion investment across the UK, acquisitions in China and capacity increases in the US Gulf Coast facilities in Alabama and Chocolate Bayou, Louisiana.
Paul Overment, CEO of Ineos Nitriles, said global demand for acrylonitrile continues to grow ahead of GDP, to meet the demand for lighter, stronger, energy efficient materials such as ABS, composites and carbon fibre.
The group’s first investment in the Middle East consolidates its position as the market leader, he added.
By its own account, the Nitriles group company is currently the world’s largest producer of acrylonitrile and acetonitrile, with more than 90% of the world’s acrylonitrile plants using its technology. It currently has four global facilities, two in North America (Texas and Ohio) and two in Europe (Germany and the UK) as well as terminals at worldwide locations.
Ineos Oligomers claims to be one of the world’s leading merchant suppliers of LAO and PAO. The size and location of the new Saudi plants “reinforces our commitment to keep pace with our LAO and PAO customers’ expanding requirements globally,” said its CEO, Joe Walton.
The oligomers company, which Ineos said produces a comprehensive range of speciality and intermediate chemicals derived from ethylene and isobutene, already has a worldwide network of LAO and PAO production plants and bulk storage locations.
Commenting on the decision to invest in Saudi Arabia – which is being viewed in some quarters as controversial after last autumn’s killing of critical journalist Jamal Khashoggi last autumn – director Tom Crotty said Ineos’ footprint has traditionally been in Europe and North America. Along with the Middle East, it has white spots to fill in is China, he said.