April 10, 2018 / 10:04 AM / 12 days ago

Oil major Total and Aramco sign $5 billion deal to build Jubail petrochemical complex

PARIS (Reuters) - French oil and gas major Total (TOTF.PA) on Tuesday signed a $5 billion deal with Saudi Aramco to build a giant petrochemical complex at their 440,000 barrels-per-day Jubail Satorp refinery.

FILE PHOTO: Logo of Saudi Aramco is seen at the 20th Middle East Oil & Gas Show and Conference (MOES 2017) in Manama, Bahrain, March 7, 2017. REUTERS/Hamad I Mohammed/File Photo

Saudi Aramco holds a 62.5 percent stake in the refinery, while Total holds the other 37.5 percent. The memorandum of understanding (MoU) was signed on the sidelines of a visit by Saudi Crown Prince Mohammed bin Salman in Paris.

FILE PHOTO - Patrick Pouyanne, Chairman of the Board and Chief Executive Officer of Total, attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 25, 2018. REUTERS/Denis Balibouse

“The project will represent an investment of around $5 billion. The two partners are planning to start the front-end engineering and design in the third quarter of 2018,” Total said in a statement.

    Total added that 8,000 jobs would be created by the deal.

    The complex will comprise a mixed-feed steam cracker with a capacity of 1.5 million tons per year of ethylene and related high-added-value petrochemical units, the statement said.

    The cracker will feed other petrochemical and specialty chemical plants representing an overall amount of $4 billion investment by third party investors, it said, taking the total investment to $9 billion.

    “This project illustrates our strategy of maximizing the integration of our large refining and petrochemical platforms and of expanding our petrochemical operations from low-cost feedstock, to take advantage of the fast growing Asian polymer market,” said Total’s chief executive Patrick Pouyanne.

    Reporting by Bate Felix; Editing by Sudip Kar-Gupta

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