SABIC, SNCG cooperate to build a coal-to-chemicals complex in Ningxia, China
In line with the Chinese government’s “Belt & Road Initiative” as well as the expansion of the economic ties and bilateral trade between Saudi Arabia and the People’s Republic of China, SABIC, along with Shenhua Ningxia Coal Industry Group Co. Ltd. (SNCG) and the Government of the Ningxia Hui Autonomous Region of China, agreed on a set of principles for cooperation in the further development of a potential joint venture between SABIC and SNCG to build a greenfield coal-to-chemicals complex.
The project will leverage the shareholders’ respective best practices, operational experience, and technologies in the petrochemical industry.
It will utilize SABIC’s advanced technologies and will also have access to SABIC’s global Technology & Innovation Centers for product development, and technical support and application development programs. SABIC will also leverage its extensive global marketing and customer service capabilities.
The project will also benefit from the participation of SNCG, which is an affiliate of Shenhua Group, one of the largest coal producers and suppliers in China, as well as a global coal-based, integrated energy and chemicals company.
It will be located in the Ningxia Hui Autonomous Region, which is one of the largest coal producing regions in China, and will benefit from the incentives and support that will be provided by the Ningxia Government.
The agreement includes certain commitments from the Ningxia Government to provide support and incentives to the project, while also providing a framework for coordination and cooperation between the three parties in connection with the project approval process.
The facility will focus on highly-differentiated applications and segments through polymers derivatives.
Yousef A. Al-Benyan, Vice Chairman and CEO of SABIC, commended the high growth rates demonstrated by the Chinese economy, highlighting SABIC’s intent on developing collaboration with production sectors in China. He further said, “We gather here today not merely to sign an agreement on a specific new project,” adding, “More broadly, we look to further SABIC’s investment in the Chinese economy and our strategic engagement with key participants in the Chinese petrochemicals industry.”
The agreement was signed during the visit of a high-level delegation from the Kingdom, led by the Deputy Crown Prince, HRH Mohammed bin Salman, under the patronage of HE Khalid Al-Falih Minister of Energy, Industry and Mineral Resources, and HE Dr. Majed bin Abdullah Al-Qasabi Minister of Commerce and Investment, and in the presence of a number of ministers, who were visiting China in connection with the Kingdom’s current participation in the G20 summit.