Petrochemical giant says results of feasibility studies into Saudi joint venture were not encouraging
Saudi Basic Industries Corp and Royal Dutch Shell have shelved plans to expand an existing petrochemical joint venture in Saudi Arabia as the results of feasibility studies were not encouraging.
The two partners in the joint project, known as SADAF joint venture in Jubail, on the Gulf coast of Saudi Arabia, first announced plans to explore an expansion of their petrochemical plant in 2012.
"Shell and SABIC have agreed not to pursue this investment further but have agreed to continue to have constructive discussions to explore other opportunities for expansion," a Shell spokesman said in a statement on Thursday.
SABIC, one of the world's largest petrochemical groups, said the decision would not have any impact on its earnings, according to a statement on the Saudi bourse website.
"The results of the (feasibility) studies were not encouraging to carry out the project," SABIC said in the statement. A SABIC spokesman declined to give further details.
The expansion was due to add polyols, propylene oxide (PO) and styrene monomer. SABIC did not say by how much the plant was due to be expanded nor gave an estimated cost.