Aramco Sees Progress on Chemical Project Plan With SABIC by Year-End

24/10/2017 21:14 AST

Saudi Aramco expects to decide by the end of 2017 on plans for a joint oil-to-chemicals project with Saudi Basic Industries Corp (SABIC), Aramco's chief executive said on Tuesday.

An industry source said in August that state oil firm Aramco and government-controlled SABIC had sought bids for engineering work on the venture to produce chemicals.

The project, known as COTC, is a key to plans for a chemicals complex costing $20 billion (15.23 billion pounds) or more. It is the first major scheme involving the two state giants.

"We finished the feasibility. We are at a stage where we need to work together and make some decision about proceeding with the project with SABIC," Saudi Aramco Chief Executive Officer Amin Nasser told Reuters.

“Things are looking good so far so hopefully we will be meeting soon and making an announcement," he said on the sidelines of an investment conference in Riyadh, adding that a decision was expected "before the year-end".

Aramco, responsible for crude output from the world's biggest oil exporter and with oil investments around the world, is in talks with China National Petroleum Corporation (CNPC) on building a 260,000 barrel-per-day refinery in Yunnan province, China.

"We are serious about partnering with CNPC on Yunnan," Nasser said, adding that the plans were "on the right track".

"We are hopeful that we can do something early next year in this project," he added.

Aramco also signed a framework agreement this year with Chinese defence conglomerate China North Industries Group Corp (Norinco) to build a refinery and chemicals complex in northeast China.

Nasser said talks with Norinco covered upgrading an existing refinery with some associated retail business and building a new refinery with 300,000 bpd capacity.

(This version of the story corrects to change headline to show Aramco sees progress on project.)

Reuters