SK Gas Enters Saudi Gas Chemical Business with 101.3 Billion KRW Investment

[Asia Economy Reporter Park So-yeon] SK Gas announced on the 29th that it will enter the local gas chemical business by establishing a joint venture in Saudi Arabia.

SK Gas and Saudi petrochemical company APC have decided to build a propylene and polypropylene (PP·PDH) production plant worth $1.8 billion (approximately 2.196 trillion KRW) in the Jubail area of Saudi Arabia.

On the 27th, SK Gas held a board meeting and approved a proposal to invest up to $81 million (approximately 101.3 billion KRW) over four years in its Singapore-based subsidiary SKGI for this joint venture investment, and to provide a contract performance guarantee for the newly established investment purpose company SKGP.

Accordingly, SKGP will establish a joint venture with AGIC, a subsidiary of Saudi APC, in the first half of the year, begin construction of the plant, and start producing more than 800,000 tons annually of propylene and polypropylene respectively from the end of 2023.

SKGP's joint venture investment stake is 15%. SK Gas explained that this is the largest plant built by a Korean company participating in the local chemical business in Saudi Arabia.

Propylene is produced through a process that removes hydrogen from propane. Polypropylene is a polymer material made by polymerizing propylene and is used in various fields such as automotive interior and exterior materials, various pipes, and kitchen containers.

This project is based on a memorandum of understanding (MOU) signed between SK Gas and AGIC when Crown Prince Mohammed bin Salman of Saudi Arabia visited Korea in June last year.

SK Gas stated that its affiliate SK Advanced successfully started vertical integration in the gas chemical sector by completing the downstream chain from 'propane-propylene-polypropylene' with the commencement of polypropylene plant construction in Ulsan last year.

This content was produced with the assistance of AI translation services.