RIYADH — Major petrochemicals producer Saudi Basic Industries Corp (SABIC) has agreed with national oil giant Saudi Aramco to conduct a joint feasibility study on a proposed oil-to-chemicals project, SABIC said on Tuesday.
SABIC had previously revealed plans for the proposed project in May.
It has said the complex, at the Red Sea city of Yanbu, could cost as much as $30bn, processing petrochemicals directly from crude oil instead of first refining the oil into products such as naphtha. This will cut out a link in the production chain from hydrocarbons to the finished products that go into plastics and other consumer goods.
Oil companies normally refine crude into transportation fuels including gasoline and diesel and leave byproducts such as naphtha to be processed separately into chemicals.
It would be the first time that the two companies teamed up on a major project in Saudi Arabia.
The Kingdom is pursuing a plan to modernize its economy by expanding industry and reducing reliance on crude sales for revenue.
Part of that plan involves using oil-based chemicals to produce materials like plastics that can go into consumer products and form the basis for a larger manufacturing industry in the country.
