Following a Memorandum of Understanding (MoU) signed last June, Advanced Global Investment Company (AGIC), a subsidiary of PP producer Advanced Petrochemical, has agreed to form a joint venture with South Korea’s SK Gas and build a propane dehydrogenation (PDH)/PP complex at Jubail, Saudi Arabia.

The jv, called Advanced Polyolefins, will be owned 85% by AGIC with SK Gas Petrochemical holding the remainder.

The PDH facility will have a nameplate capacity of 843,000 t/y, feeding two PP plants of  400,000 t/y each. AGIC has signed a license agreement with Lummus Technology for its Catofin propylene process and with LyondellBasell for Spheripol and Spherizone PP technologies. The jv has also selected project management consultants, although did not disclose the names of the companies.

Saudi Aramco will provide propane feedstock on a long-term basis and AGIC has already signed a conditional land allocation letter with the Saudi Royal Commission to locate the project within Jubail II.

Total costs in the project are anticipated at about $1.8 billion. About 25% of the funds will come from equity and the rest from loans. Construction is expected to start in 2021 with commercial operations scheduled by the second half of 2024.

Advanced already operates a PDH/PP complex at Jubail using Catofin and Novolen technologies, respectively, producing 450,000 t/y PP.

It is also a partner in SK Advanced, which operates a PDH facility in Ulsan, South Korea, producing 600,000 t/y propylene. SK Advanced is owned 45% by SK Gas, 30% by Advanced and 25% by Petrochemical Industries Co. (PIC) of Kuwait.

Advanced and SK Gas also signed two other MoUs last June, one relating to a feasibility study for a steam cracker and downstream products at Jubail Industrial City and the other for a 100,000 t/y PP compounding plant.