Sadara Chemical has agreed to supply ethylene oxide (EO) and propylene oxide (PO) to a new joint venture being established between US industrial and specialty chemicals manufacturer Harcros Chemicals and Saudi’s ARA Specialty Industrial Company.

Harcros-ARA intends to build a specialty chemical plant in PlasChem Park in Jubail Industrial City II, Saudi Arabia. The plant’s output will be used in a variety of applications, including construction materials, paint and coating additives, metal treatment and mining, water treatment and enhanced oil recovery. Methyldiethanolamine (MDEA) will also be produced for oil and gas applications.

“This venture will be the first of its kind in Saudi Arabia and will contribute greatly to filling an interesting block in the value chain by producing more sophisticated specialty petrochemical products and localizing advanced technologies needed across various industries. This will result in reducing major imports and raising local content, ultimately contributing to Saudization and the building of local capabilities,” commented ARA’s managing director, Aziz Alenazi.

Sadara signed a previous supply agreement for EO/PO in January, that time with SADIG-ILCO, a joint venture between Saudi group SADIG Industries and Germany’s ILCO Chemikalien, which is also building a specialty chemicals production plant at PlasChem Park.

ILCO’s technical director, Corvin Volkholz, said: “We believe diversification to the existing chemical market in the Kingdom will open new opportunities for further expansion of the Kingdom’s specialty chemicals industry. SADIG-ILCO will allow us to tap the region’s growing demand and expand into Saudi Arabia, as well as the other regional markets.”

Ahmad Alubaid, managing director of SADIG Industries, added that it was investing approximately $40 million in the project, which was one of several the company was working on in the Kingdom with a total investment of around $300 million.

No start-up dates were given for either of the proposed specialty chemicals plants. However, Sadara said several existing investors in PlasChem Park will conclude their planned project engineering activities in the first half of 2018 with ground-breaking set to take place in the second half of this year.