Saudi Arabian propylene and PP producer Advanced Petrochemical has signed a Heads of Agreement with Global Company for Downstream Industries (GDI) to develop a project to produce specialty chemicals from pyrolysis gasoline and pyrolysis oil at Jubail Industrial City II. The HoA, which was signed on Nov. 14, is valid for a period of six months.

GDI was formed to explore downstream business opportunities in sectors including petrochemicals, minerals, water treatment and pharmaceuticals, with the aim of transforming competitively priced feedstocks into high value-added products and contributing to the Kingdom’s Vision 2030 strategy.

The project, which is currently estimated to cost $580 million, comprises a portfolio of more than 12 specialty chemicals, including hydrocarbon resins, aromatic solvents, premium wash oils, naphthalene and other products to be made for the first time in the Middle East and North Africa. Overall capacity is put at around 300,000 t/y with start-up scheduled for the first half of 2021.

Advanced Petrochemical aims to own 30-40% of the project through its subsidiary, Advanced Global Investment Company (AGIC), in which it holds 95% equity. The project will be funded through a combination of 30% equity and 70% debt.

The company already operates a propane dehydrogenation (PDH) plant and a PP plant at Jubail. It is also a partner in SK Advanced, which commissioned a PDH facility in Ulsan, South Korea, in May 2016. SK Advanced is owned 45% by SK Gas, 30% by Advanced and 25% by Petrochemical Industries Co. (PIC) of Kuwait. The partners are also reported to be studying building a PP plant at the Ulsan site.