Saudi Aramco, SABIC award initial contract for $20bn crude-to-chemicals project

Saudi Aramco and Saudi Basic Industries Corporation (SABIC) have signed a contract with US engineering firm KBR to manage preliminary engineering and design work for a $20bn crude oil-to-chemicals project.

The agreement follows and memorandum signed between Aramco and SABIC last November to build the complex, which is claimed to be the largest crude-to-chemicals facility in the world.

Read: Saudi Aramco, SABIC plan to build $20bn oil-to-chemicals complex

The facility would process about 400,000 barrels of Arabian light crude oil per day to produce around 9 million tonnes of chemicals and base oils and 200,000bpd of diesel for domestic consumption.

Saudi Arabia’s state news agency reported the new contract aims to finalise the scope of the project, select technology suppliers, the implementation of engineering work and its preliminary designs.

“The establishment of the second management contract for KBR is another fundamental step in the kingdom’s relentless efforts to reorient its resources,” said Aramco president and CEO Amin Al Nasser.

“With KBR entering into the management and implementation of this project, Saudi Aramco and SABIC are confident that the parties are well placed to move the project forward in its early stages, as well as their confidence in more reliance on local content.”

KBR will partner with UK firm Wood Group to ensure the design phase is completed on time.

Officials said last year the project would create an estimated 30,000 direct and indirect jobs and add 1.5 per cent to gross domestic product by 2030.

A final decision on whether to go ahead was expected by the end of next year and the plant was initially scheduled to begin operations in 2025. However, SABIC vice president and CEO Yousef Al-Benyan appeared to indicate this timetable had changed on Thursday.

Al-Benyan “pointed out that accelerating the completion of the main stages of the project confirms the determination of the parties – the partners in this project – to achieve its objectives and objectives of the Kingdom’s economic vision, to achieve economic diversification”, according to SPA.