Leading European oil company, BP has clinched a deal with Delta International for the setting up of a £1.1bn chemical plant in Saudi Arabia.
BP revealed that its petrochemical and refining division, Innovene had signed a MoU with the Saudi Arabian firm, Delta International for a plastics packaging unit in the country. The unit would be capable of producing ethylene from inexpensive local natural gas for the manufacturing of plastic packets as well as other products.
This move is bound to make BP rivet its hold on the country that is the richest in oil reserves. It also heralds a successful floatation of its petrochemical firm, Innovene that was segregated into an independent company in April. Moreover, BP believes that development of sites at Saudi Arabia would in turn invite potential clients from China and Asia to its chemical and refining firm.
Chief executive of Innovene, Ralph Alexander, called the deal “the first chapter in a long and fruitful partnership between Innovene and the Kingdom of Saudi Arabia.”
Meanwhile, chief representative of BP in Saudi Arabia, Andrew Barton, said, “Saudi Arabia is one of the best places in the world to produce petrochemicals given competitively priced feedstock and excellent infrastructure.” He informed further that the plant would be constructed in the industrial park, Jubail, located on Saudi Arabia's eastern coast and is expected to generate 1.2m tonnes of ethylene per year.
Regarding the benefits of the plant for the Saudi government, economic adviser to the kingdom, Ihsan Buhulaiga said, “This is good news for the kingdom because we need all the foreign investment we can get, especially in the private sector.”
In addition, experts are anticipating that at least 20-30% of Innovene will be offered to the public and sold off by BP by the end of the year.
Posted
on : Fri, 10 Jun 2005 18:55 GMT | Business News
By : Rob Davis
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