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Sabic today signed an agreement in Tokyo with Japan Saudi Arabia Methanol Co. (JSMC), a consortium led by Mitsubishi Gas Chemical, renewing the companies’ partnership in Saudi Methanol Co. (Ar-Razi) for another 20 years until 29 November 2038. Under the terms of the agreement, which was approved by regulatory authorities, Sabic will raise its stake in Ar-Razi to 75%, reducing JSMC’s shareholding in Ar-Razi to 25%. JSMC will pay $1.35 billion to Sabic for renewing the joint venture (JV) partnership, which Sabic will use to finance the refurbishment of Ar-Razi’s existing methanol plants or establish new facilities, the company says. The payment will be made in equal instalments over a period of three years.
By concluding the agreement, Sabic will become an equal co-owner with JSMC in a new, highly-efficient methanol production technology, which will be commercialized inside or outside Saudi Arabia, Sabic says. “Ar-Razi is the first joint venture in Sabic’s history and one of the most successful partnerships that the company has had for over 40 years,” said Yousef al-Benyan, Sabic CEO, at the signing.
Ar-Razi was established in 1979 as a 50/50 JV between Sabic and JSMC with the aim of developing, establishing, owning, and operating a methanol complex. Ar-Razi operates five methanol plants at Jubail, Saudi Arabia, with a combined capacity of 4.85 million metric tons/year, according to IHS Markit data.
By Natasha Alperowicz
Source: Chemical Week
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