Wednesday, May, 29, 2024 02:00:14
  •   The deal comes as a part of the Saudi Arabian company’s strategy to boost its methanol shares this year.
  •  The deal also allows the company to capitalize on the rapidly growing shale gas production in North America.

SABIC, a Saudi Arabian diversified Petrochemical manufacturing company, has reportedly announced that it has entered into a preliminary agreement with American methanol market player, South Louisiana Methanol LP (SLM), to develop a new methanol facility in the U.S.

Reports cite, the move comes under Sabic’s current growth strategy that aims to increase the methanol shares in the company’s portfolio this year. The agreement would also allow the Saudi Arabian company to capitalize on North America’s booming shale gas production industry.

According to a report, the facility would be North America’s biggest methanol production plant, producing approximately 2 million metric tons of methanol on an annual basis and would be capable of supplying both domestic & international markets.

The partnership agreement would reportedly span over a period of six months and contains an extension provision. The final decision of investment would be taken after the two parties successfully acquire the required licenses and approvals.

In a statement released by Sabic, the firm noted that the deal is part of an ongoing strategy to focus upon geographical diversification of the company’s business to gain access to new global markets while also enabling the company to access competitive feedstock.

Meanwhile, the largest oil producing company in the world, Saudi Aramco, is conducting discussions with Sabic to acquire a majority 70% stake in the company. Moreover, the Saudi Arabian chemicals firm is also seeking to considerably boost the prominence of methanol in its product portfolio this year.

According to reports, the Sabic-SLM partnership deal is subject to regulatory approvals & financing. The financial information related to the deal has not been unveiled yet.