The newly announced coal-to-chemicals project between Saudi Basic Industries Corp. (SABIC) and China's Shenhua Ningxia Coal Industry Group (SNCG) could cost between $3-4bn, Al Arabiya News Channel has reported.
“The project is approximately $3-4bn and we expect it to be ready in 2020,” Yousef al-Benyan, vice chairman and CEO of SABIC, told the news channel on Thursday.
The joint venture will be located in the coal-rich Ningxia Hui region, where it would use locally available coal feedstocks to be supplied by SNCG.
It will be the first of its kind for SABIC, which also recently agreed to develop an oil-to-chemicals complex with Saudi Aramco.
Upon announcing the deal in May, Sabic said the project is part of its ongoing strategy to geographically diversify its operations and seek future investment opportunities that open doors to new markets.
Al-benyan commented: "This project reflects our enthusiasm to diversify our sources of feedstock, paving the way for further investment opportunities that depend on different and untraditional sources of feedstock."
"This protects SABIC against the fluctuations and cyclical movements in feedstock price in the international markets, which helps ensure a profitable growth strategy," he added.