Alujain Corporation, a leading Saudi petrochemicals, energy, mining and metals company, said it has signed an agreement with Basell International Holdings, a subsidiary of New York-listed LyondellBasell Industries, for the sale of a 35% stake in its subsidiary, National Petrochemical Industrial Company (Natpet), for nearly SAR1.87 billion ($500 million).

 

The agreement covers selling a 35% stake, representing 37.45 million shares in Natpet’s capital, to Basell International, as part of a comprehensive joint venture arrangement, said the company in a statement.

 

The strategic partnership agreement was signed today (January 16) at the Ministry of Energy headquarters in Riyadh in the presence of Minister of Energy Prince Abdulaziz bin Salman bin Abdulaziz.

 

The agreement outlines Basell's acquisition of a 35% stake in Alujain National Company for Industries (under development), focused on establishing a petrochemical complex with an investment cost of SAR7.5 billion.

 

This comes after completing the current detailed engineering design (FEED) phase and evaluating the economic feasibility study for the new project, and obtaining the necessary approvals to invest in the new project, which will achieve the strategic goals of the two partners.

 

This agreement is poised to make a substantial contribution to the realization of Saudi Vision 2030 goals, aiming to maximize added value to the national economy within the sector. 

 

According to Alujain, the project is expected to play a crucial role in producing local speciality plastics, aligning with localization plans for the automotive, electronics, pipes, batteries, and construction industries.

 

This partnership follows the Ministry of Energy's approval for the allocation of necessary feedstock to establish the new Alujain Company project. 

 

The project includes a propylene production plant, a polypropylene production plant, and a complex for the production of compounds and specialized materials from polypropylene, marking a significant milestone as these will be produced for the first time in the Kingdom. 

 

Additionally, the plan involves linking the two production units at Natpet with the new company project to enhance the reliability, production efficiency, and overall economic performance of both projects.

 

Alujain’s ownership in Natpet at the date of signing this agreement stands at 98.7% of the total shares.

 

A closed joint stock company with its head office and propylene/polypropylene complex in Yanbu Industrial City, Natpet has a production capacity of 400,000 tonnes per annum of polypropylene. 

 

The authorized and paid-up capital comprised 107 million shares of SAR10 per share and the book value of the company stands at SAR2.53 billion as of November 30, 2023.

 

Once the deal is completed, Alujain will receive approximately SAR1.87 billion in cash. The deal is expected to be completed once the terms of the agreement are met and the relevant approvals are obtained.-TradeArabia News Service