SK Gas is entering the global gas and chemical business in partnership with a Saudi Arabian company.
SK Gas announced on March 29 that it has agreed to establish a joint venture (JV) with Saudi Arabia's petrochemical company APC. The two companies will build a US$1.8 billion propylene (PDH) and polypropylene (PP) production plant in Jubail, Saudi Arabia through the JV.
SK Gas will invest up to US$81 million in SK Gas International (SKGI), a subsidiary in Singapore, over the past four years, and guarantee the implementation of contracts for SK Gas Petrochemical (SKGP), a newly established special purpose company (SPC).
SKGP aims to launch a joint venture with AGIC, a subsidiary of Saudi APC, in the first half of this year, and start construction of the envisioned plant, which will produce more than 800,000 tons of propylene and polypropylene per year from the end of 2023. The plant is the largest of its kind to be established by a Korean company in Saudi Arabia. SKGP will hold a 15 percent stake in the JV.
This project is based on a memorandum of understanding (MOU) signed by SK Gas and AGIC when Muhammad bin Salman, a Saudi Arabian prince, visited Korea in June in 2019.
“AGIC recognized SK Gas’s achievements including operation know-how exports to INEOS, a global chemical company, based on its 100 percent propylene utilization since 2016, and th establishment of a joint venture with LyondellBasell,” a company official said.