Advanced amends agreement with SK Gas by adding SAR 300 mln IPA plant

Advanced Petrochemical Co. signed an amendment to the partnership agreement between its subsidiary, Advanced Global Investment Co. (AGIC), and SK Gas Petrochemical Pte. Ltd. (SKGP), a unit of SK Gas Co. Ltd.

Under the amendment, an isopropanol (IPA) plant with a capacity of 70,000 tons per annum will be added, along with the Propane Dehydrogenation (PDH) and Polypropylene (PP) plants that were already announced earlier.

The company said in a bourse statement that by adding the IPA plant with an estimated cost of SAR 300 million ($80 million), the total cost of the project for the three factories is currently estimated to be approximately SAR 7.05 billion ($1.88 billion).

The project will be financed 25% by equity from shareholders and remaining 75% will be financed by the joint venture firm through borrowing from lenders.

The company expects the financial impact of the investment to reflect after the commencement of commercial operations in the second half of 2024.

Any major development related to the project will be announced as per related regulations and instructions, the statement added.

The inclusion of the IPA plant is part of strategy to promote the downstream industry in line with the Vision 2030, the company said, adding that IPA is used in variety of applications including hand sanitizers, medical applications, electronics industry, etc.

According to data compiled by Argaam, in March, Advanced signed a partnership agreement with SK Gas Co. Ltd. to establish and operate propane dehydrogenation (PDH) and polypropylene (PP) complex with a design capacity of 843,000 metric tons per annum of propylene and 800,000 metric tons per annum of polypropylene in Jubail Industrial City worth SAR 6.75 billion ($1.8 billion).