Dow and Saudi Aramco sign MoU for potential equity ownership restructure in Sadara JV

MOSCOW (MRC) -- The Dow Chemical Co. and Saudi Aramco has announced a non-binding Memorandum of Understanding (MoU) that sets forth a process for Dow to acquire an additional 15% ownership interest from Saudi Aramco in Sadara Chemical Company (Sadara), as per Hydrocarbonprocessing.

"Sadara is the result of a game-changing partnership between Saudi Aramco and Dow by delivering market-driven solutions that support the diversification of the country’s economy," said Andrew Liveris, Dow’s chairman and CEO. "Increasing our equity stake in this iconic joint venture is a powerful example of our strategic partnership with Saudi Aramco and is yet another accelerator in Dow’s long-term growth strategy designed to capture growing consumer-led demand in our key end-markets of transportation, infrastructure, packaging, and consumer products in developing regions."

Saudi Aramco President and CEO Amin H. Nasser said, "We are proud of our partnership with Dow given its preeminent stature among the world’s leading chemical companies. Dow’s larger stake in Sadara is an endorsement of the Kingdom’s vibrant ecosystem, and signals Dow’s confidence in our partnership as a model of mutually beneficial foreign direct investment. The time is right to fully leverage Dow’s global leadership to further contribute to the Kingdom’s economic transformation in line with Vision 2030."

The potential equity equalization would occur following the later of two events (i) the intended separation of the Materials Science Company, within 18 months after the close of the merger of equals between Dow and DuPont on August 31 and (ii) Sadara’s completion of the Creditors’ Reliability Test, which is part of the limited-recourse financing used to fund the Sadara project development. The anticipated financial impact of the potential transaction is not being disclosed. The Sadara financial structure and governance remain unchanged.

The Sadara chemical complex, the largest of its kind ever built in a single phase, is currently operating all of its 26 world-scale units that manufacture a portfolio of valued-added performance plastics and specialty chemicals. The more than three million metric tons of performance-focused products serving the Packaging, Transportation, Infrastructure and Consumer markets will add new value chains to Saudi Arabia’s vast hydrocarbon reserves, resulting in the diversification of the economy and region.

As MRC informed before, Sadara has recently built a world-scale, fully integrated chemicals complex in Jubail Industrial City 2, Kingdom of Saudi Arabia. The complex is comprised of 26 manufacturing units, possess flexible cracking capabilities and is expected to produce more than 3 million metric tons of high-value performance plastics and specialty chemical products. The first production units came on-line in the second half of 2015, with full production starting in mid-2016. The last unit out of 26 began production in the first half of August 2017.

Sadara Chemical is a USD20 billion petrochemical joint venture between national oil giant Saudi Aramco and Dow Chemical.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber. The company"s more than 5,000 products are manufactured at 188 sites in 36 countries across the globe.
MRC

MOSCOW (MRC) -- Sika has acquired ABC Sealants, a leading Turkish-based manufacturer of sealants and adhesives, said Sika in its press-release.

The acquisition will strengthen Sika’s market position in Turkey and further establish Sika as a comprehensive supplier of solutions for interior finishing applications.

ABC Sealants is a highly regarded brand in the Turkish building materials market with a strong presence in the distribution business. Based in Istanbul, the company runs a manufacturing facility producing a wide range of construction sealants and adhesives. The acquired production site will not only improve Sika’s ability to serve customers in the Turkish market but will also function as a distribution and production hub for the Middle East and Africa, reinforcing the supply chain in this region. With the wider product range and improved access to professional distribution channels, the two companies will profit from extensive cross-selling opportunities.

Ivo Schadler, Regional Manager EMEA: "This acquisition provides us with a solid production platform to further expand the sealant and adhesive business in Turkey as well as in the Middle East and Africa. We welcome the new employees into the Sika team and look forward to growing our business together".
MRC

MOSCOW (MRC) -- Imports of unmixed polyvinyl chloride (PVC) into Kazakhstan rose in January-July 2017 by 8% year on year to 31,200 tonnes, reported MRC analysts.
PVC imports into Kazakhstan slightly decreased in July, reaching 6,000 tonnes compared with 6,600 tonnes in June.

Total SPVC imports to Kazakhstan increased to about 31,200 tonnes in the first seven months of this year, compared to 29,000 tonnes in the same period in 2016.

Due to the geographical position, the main suppliers of PVC to Kazakhstan were Chinese producers, with the share of about 99% of the local market over the stated period.
MRC

MOSCOW (MRC) -- Citgo Petroleum is shutting its Corpus Christi oil refinery, said two sources, as a tropical storm that threatens to become a major hurricane by the weekend approaches the Texas coast, said Hydrocarbonprocessing.

On Thursday, forecasters said Tropical Storm Harvey is expected to become a Category 3 hurricane packing 115 mile-per-hour (100 knot) wind speeds by landfall late Friday or early Saturday.

A spokeswoman for Citgo, the U.S. refining arm of Venezuela state-own oil company PDVSA, could not immediately be reached for comment. In a statement earlier today, the company said it was prepared to implement its contingency plans "if and when necessary."
MRC

MOSCOW (MRC) -- Petronas has restarted a No.1 low density polyethylene (LDPE) plant following an unplanned shutdown, according to Apic-online.

A Polymerupdate source in Malaysia informed that the company has resumed operations at its plant last weekend. The plant was shut due to feedstock supply issue caused by an unplanned outage at the upstream cracker.

Located at Kerteh in Terrenganu, Malaysia, the No. 1 LDPE plant has a production capacity of 255,000 mt/year.

As MRC wrote before, in late January 2017, Petronas said its new USD27 billion refining and petrochemical complex project in the southeast Asian country is on track for start-up in 2019. RAPID, located within the Pengerang Integrated Complex in the southern Malaysian state of Johor, is designed to have a 300,000-bpd oil refinery and a petrochemical complex with a production capacity of 7.7 MMt.

Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
MRC