Saudi Basic Industries Corporation (Sabic), 70 per cent of which is owned by state-owned oil and gas giant Saudi Aramco, has inked an agreement with Saudi Export Development Authority (Saudi Exports) to promote and develop non-oil exports, a key tenet of the kingdom’s Vision 2030 economic diversification plan.

According to a statement on state news agency, SPA, the deal – signed in the presence of Eng Fuad Mohamed Mousa, Saudi Exports’ vice president of local content and business development unit – will focus on promoting Sabic’s products internationally.

The move supports the kingdomz’s drive to boost its exports, with Saudi Arabia’s Vision 2030 expected to increase the proportion of non-oil exports from 16 per cent to 50 per cent of the total value of the kingdom’s GDP.

Saudi Exports helps exporters overcome obstacles related to the export of their product, raise the knowledge of export practices, and offer consulting services.

The deal comes four months after Saudi Aramco, the developer behind some of the world’s largest oil and gas projects, acquired a 70 per cent in Sabic from the Crown Prince HRH Mohammed Bin Salman-led Public Investment Fund in a transaction valued at $69.1billion (SR259.1 billion).

Saudi Aramco’s senior vice president of downstream, Abdulaziz Al Judaimi, said at the time that Sabic was a “strategic fit” for the oil giant, which is investing in the development of resource-efficient processes, such as crude-oil-to-chemicals technology, or COTC.

The acquisition is expected to support Saudi Aramco’s plans to enhance its downstream portfolio by increasing its refining capacity from the current 4.9 million barrels per day (bpd) to 8-10 million bpd by 2030.

STAKE RAISED TO 75PC

Sabic has signed an agreement with the Japan Saudi Arabia Methanol Company (JSMC), renewing the partnership in the Saudi Methanol Company (Ar-Razi) for another 20 years.

The agreement comes after a long and fruitful partnership between the two companies, marked by the successful transfer of technology. It demonstrates Sabic’s strategy to strengthen relationships with its global partners and reflects its leading position in the petrochemicals industry, including methanol production.

Under the agreement, which was approved by regulatory bodies, Sabic will raise its stake in Ar-Razi to 75 per cent, reducing JSMC’s shareholding in Ar-Razi to 25 per cent. JSMC will pay more than SR5 billion to Sabic for renewing the joint venture partnership, which Sabic will use, in part or whole, to finance refurbishment of Ar-Razi’s existing methanol plants or set up new ones.

By concluding the agreement, Sabic will become an equal co-owner with JSMC in a new, highly efficient methanol production technology, which will be freely commercialised inside or outside the Kingdom of Saudi Arabia.

“Ar-Razi is the first joint venture in Sabic’s history and one of the most successful partnerships that the company has had over 40 years,” said Yousef Al-Benyan, Sabic Vice Chairman and CEO.

“Renewing the partnership for more 20 years is proof of its success and contribution to the Saudi-Japan strategic cooperation, in line with Vision 2030,” he added.

Ar-Razi was established on November 24, 1979, as a 50/50 joint venture between Sabic and JSMC with the aim of developing, establishing, owning and operating a methanol complex.

SUSTAINABLE DEVELOPMENT

The Saudi-based global chemical giant, earlier launched its sustainability roadmap outlining ambitious targets relating to resource efficiency, climate change, food security, infrastructure and preservation of the environment.

The Sabic Sustainable Development Roadmap 2019, aligned to the United Nations Sustainable Development Goals, forms part of the company’s 2025 strategy.

It spans its entire value chain from sourcing more sustainable feedstock, improving energy efficiency across operations, increased focus on sustainable product and process innovation, to advocacy and fostering collaborations to mobilize multi-stakeholder action.

The roadmap outlines the company’s new initiatives that will make significant contributions to the UN’s SDG targets, as well as providing growth opportunities for the business.

Sabic has committed to reducing its energy consumption, greenhouse gas emissions and water usage intensity by 25 percent by 2025 from 2010 levels.