The British petrochemical corporation Ineos has inked a deal with Saudi Aramco and Total to invest $2 billion building three plants in a petrochemical complex in Saudi Arabia.
It’s the first time Ineos, started by a former executive Exxon Mobil Corp. executive and Britain’s richest person, is entering the Middle East.
The three plants are part of a $5 billion petrochemical complex under development by state-owned oil giant Saudi Aramco and French oil major Total SA, according to a release from Ineos.
Ineos, which has a U.S. headquarters in League City outside Houston, has been growing with acquisitions oil and gas fields and a major pipeline in the U.K. and chemical plants in China and investments in plants in Belgium and the U.S. Gulf Coast and Alabama.
“This is a major milestone for Ineos that marks our first investment in the Middle East. The timing is right for us to enter this significant agreement in Saudi Arabia with Saudi Aramco and Total. We are bringing advanced downstream technology which will add value and create further jobs in The Kingdom,” Ratcliffe said in a release.
The company said the plant’s location will give it Ineos access to “competitive raw materials and energy, with well invested infrastructure, to better serve customers directly in the Middle East and markets across Asia.”
Ineos has signed a memorandum of understanding with Saudi Aramco and Total to build the plants in the Jubail 2 complex in Saudi Arabia. The plants include a 425,000 metric ton acrylonitrile plant and a a 400,000 metric ton linear alpha olefin plant.
The investments will be integrated into Saudi Aramco and Total’s mixed feedstock steam cracker, which is expected to have a 1.5 million metric ton capacity.
“Mixed-feedstock steam cracking and closer integration of refining and chemical operations in Saudi Arabia represents a wider trend developing in the Middle East and Asia Pacific, as major oil company’s look to gain further exposure to the petrochemical industry as transportation fuels are set to decline,” said Patrick Kirby, Chemicals Principal Analyst at Wood Mackenzie said in a statement.
Saudi Aramco has been drastically increasing its investments in petrochemicals as it looks to diversify its portfolio. The company announced a $69 billion deal to buy the petrochemical giant SABIC in March and its subsidiary Motiva is investing in petrochemicals on the Gulf Coast.