Sector News

Sabic raises stake in methanol JV with Japanese consortium

July 1, 2019
Chemical Value Chain

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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