SABIC's AR-RAZI Secures Feedstock Allocation Approval for 1.8 Million Tonnes/Year Methanol Project

en.Wedoany.com Reported - On September 6, Saudi Basic Industries Corporation (SABIC) announced that its subsidiary, Saudi Methanol Company (AR-RAZI), had obtained approval from Saudi Arabia's Ministry of Energy on September 3 to allocate the required feedstock for a methanol plant with an annual capacity of 1.8 million tonnes in Jubail Industrial City. SABIC stated that further major project developments, including the final investment decision, will be announced separately.

AR-RAZI is a joint venture operated by SABIC and Japan Saudi Arabia Methanol Company (JSMC). Following an equity adjustment in 2019, SABIC holds a 75% stake, while JSMC holds 25%. When the two parties renewed their cooperation agreement in 2018, they extended the joint venture term by 20 years and agreed that JSMC would pay SABIC more than 5 billion Saudi riyals, with the funds available for refurbishing AR-RAZI's existing facilities or constructing new plants.

AR-RAZI's existing methanol production system in Jubail has a design capacity of approximately 4.05 million tonnes per year, comprising multiple methanol production units. Among them, the fifth unit has a design capacity of approximately 1.7 million tonnes per year and commenced operations in 2008. The existing units have long utilized natural gas-related feedstock to produce methanol.

The approval document obtained on September 3 only confirms that Saudi Arabia's Ministry of Energy has agreed to allocate the "required quantity of feedstock" for the new 1.8 million tonnes/year methanol plant, without disclosing the specific feedstock type, allocated quantity, or pricing terms. SABIC also did not disclose in this announcement the total project investment, EPC contracting model, engineering design contractor, technology licensor, construction timeline, or commercial start-up date.

SABIC has not yet made a final investment decision on the project. In its announcement on the Saudi Exchange, the company explicitly listed the FID as a major project development requiring subsequent disclosure.