SABIC Completes Buy of Shell's SADAF Stake
SABIC has completed the purchase of partner Shell Arabia’s half of their 50:50 joint venture SADAF for $820 million. The transfer plans were announced on Jan. 22. The Saudi petrochemicals giant is exercising an option of the original agreement allowing it to renew or end the partnership by the end of 2020.
The jv established in 1980 operates six petrochemical plants with total annual output of more than 4 million tonnes of chemicals including ethylene, MTBE and styrene at a complex in Jubail, on Saudi Arabia’s Gulf Coast.
As sole owner, SABIC will have the opportunity to further optimize operations at SADAF and invest in the production facilities, including integrating them with its other affiliates, while Shell invests farther downstream in the Kingdom.
In 2014, the partners abandoned plans for expanding the joint venture, which would have meant building new plants for polyols, propylene oxide and styrene monomer, as results of feasibility studies were not encouraging.
Projects such as the Sadara jv between Dow Chemical and Saudi Aramco are already building large capacities for such petrochemical products.
"Completion of this deal shows the clear momentum behind Shell's global, value-driven $30 billion divestment program," the oil and petrochemicals major said.