Sipchem and Sahara will jointly look at US investments
November 29, 2018
Saudi International Petrochemical Co. (Sipchem), a producer of methanol and acetyls currently in talks to merge with Sahara Petrochemicals, will resume its talks to invest in a shale gas–based project in the United States at the end of the first quarter of 2019, Sipchem’s CEO Ahmad al-Ohali tells CW. He was speaking to CW on the sidelines of the GPCA Forum in Dubai.
“We are studying investment in the US based on shale gas…but we are giving it a bit of a low profile at the moment because we are concentrating on the merger with Sahara. The project continues to be on our radar, however. We have had discussions in the US already and they will continue in the first quarter of next year,” Ohali tells CW. The company will by then be advanced with the merger with Sahara and will be able to make a decision on the US project by the end of the first quarter. “We are looking into a methanol and ethylene cracker as a possible project in the US. This is under evaluation stage, a new geographic area for us as an investor.”
“By the end of the first quarter we should be one company with Sahara, so we would go as one company [with the US investment],” he says. Ohali explains that the fact that the Zamil Group is a shareholder in both Sipchem and Sahara is important as far as the potential merger is concerned but in addition, companies in the Middle East are going through consolidation to add scale. “Sipchem and Sahara already have a good relationship; we complement each other.” The merger, announced in October, would create a company with combined 2017 pro-forma sales of about $2 billion.
Sipchem would also like to expand in Saudi Arabia but has been unable to secure feedstock.
By Natasha Alperowicz
Source: Chemical Week