Shell completes sale of Sadaf jv to Sabic

Netherlands-headquartered oil and gas company Shell has completed the sale of its 50% share in Sadaf, the petrochemicals joint venture located in Al Jubail, in Saudi Arabia, to its joint venture partner, petrochemicals giant Sabic, for US$820 million. This sale was announced on 22 January 2017. Completion follows anti-trust filings in the relevant countries and regulatory approval from Saudi Arabia.

The sale is part of Shell’s broader US$30-billion divestment programme, and the company says it will enable it to focus on its downstream activities and make selective investments to support the growth of its global chemicals business.

For Sabic, the acquisition will enable it to optimise operations at Sadaf and further invest in the facilities, integrating them with its other affiliates. This deal does not impact Shell’s other interests in Saudi Arabia.

The Sadaf complex, on 460 acres in Jubail, comprises an ethylene plant, two styrene plants, a salt plant, an ethyl chloride-caustic plant, a methyl tertiary butyl ether plant, and a cogeneration plant.

It produces an average of more than 4 million tonnes/year of chemicals from ethane, benzene, methane, butane, and salt brine.

Sabic and Shell formed the joint venture in 1980. It started producing ethylene in1984. The jv agreement was to have expired in 2020.