Innovene and Delta Oil to Explore Major Petrochemical Investment
Innovene, BP's petrochemicals and refining subsidiary, and Delta International, a Saudi-owned independent development company, have signed a Memorandum of Understanding for a major investment in Saudi Arabia's petrochemical sector.
The memorandum marks the beginning of detailed negotiations between Innovene and Delta for the construction of a world-scale cracker and associated derivative capacity in the Kingdom, with sites being explored in Jubail. It is intended that this project, which is expected to cost around $2bn, will form a platform for future long-term growth opportunities.
Innovene and Delta will be equal partners within the joint venture. It is anticipated that, subject to final approvals, an agreement will be signed before the end of the year, with commissioning of the first plants expected in late 2008.
The MOU was signed last night at a ceremony in Riyadh by Ralph Alexander, CEO of Innovene and Mr Badr Al-Aiban, Chairman and CEO of Delta in the presence of His Highness Prince Saud Bin Thunayyan Al-Saud, Chairman of the Royal Commission for Jubail and Yanbu.
Commenting on the joint venture with Delta, Ralph Alexander said: "We see this joint venture as the first chapter in a long and fruitful partnership between Innovene and the Kingdom of Saudi Arabia. It confirms Innovene's position as a truly global petrochemicals player, including Delta on the list of highly respected companies with whom we have partnerships around the world and adding a major Middle East position to our existing portfolio of assets in North America, Asia and Europe."
Badr Al-Aiban commented: "We are delighted to be partnering with Innovene, one of the largest petrochemical companies in the world, and look forward to a successful venture. Delta has a long reputation for its ability to forge highly successful long-term strategic alliances with both major companies and the countries in which we operate. As a Saudi company with domestic and global activities, we are pleased to be able to play such an important part in the continuing development of Saudi Arabia's petrochemicals industry."
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