Saudi Aramco has signed a Memorandum of Understanding (MoU) with Russian petrochemical giant Sibur and the Russian Direct Investment Fund (RDIF) to explore opportunities for cooperation and investment in Russia’s and Saudi Arabia’s petrochemical markets.

Chairman of Sibur’s management board, Dmitry Konov, commented: “Partnership with one of the largest petrochemical companies in Saudi Arabia will enable Sibur to build up competencies, reach out to new sales markets and explore the promising Middle East market, a relatively new target for the company. Combined expertise in implementing large-scale projects and entering new markets will further consolidate market leadership of both companies.”

The Saudi group has been looking outside the Kingdom to invest in joint-venture opportunities as part of its drive to diversify investments before its proposed initial public offering next year in the hope of achieving a better valuation and enhancing its attractiveness for investors.

This year, Aramco has taken full control of the Port Arthur refinery in Texas, USA, which it previously operated as Motiva Enterprises, a 50:50 joint venture with Shell Oil. In March, during a visit by Saudi Arabia’s King Salman to Beijing, Aramco and Sabic signed MoUs to develop refining and chemical plants in China.

Aramco also announced early this month that it had bought a 50% share in Petronas’ wholly owned subsidiary, PRPC Polymers. The companies had signed a Share Purchase Agreement (SPA) in February for Aramco Overseas Holding Cooperatif to take the equity stake, for which it is reported to have paid $900 million.

The deal allows Aramco to participate in Petronas’ Refinery & Petrochemical Integrated Development (RAPID) project in Johor, within the Pengerang Integrated Complex (PIC), where the partners will have equal ownership in selected ventures and assets. The 300,000 bbl/day refinery will produce a range of petroleum products as well as feedstock for the complex, which will produce 3.5m t/y of petrochemicals.

According to Datuk Sazali Hamzah, Petronas vice president and Petronas Chemicals Group (PCG) managing director/CEO, the complex was 75% complete as at August 2017 with the first petrochemical production to follow the refinery’s completion, which is scheduled for 2019. “By 2020, our petrochemicals project under PIC will provide a strong foundation for us to move into derivatives and specialty chemicals,” he said, adding that beyond 2020, PCG will focus on assessing opportunities at Pengerang, Kertih, Gebeng and East Malaysia.