Aramco-Dow JV Sadara Chemical Q2 revenue climbs 34% on year

Sadara Chemical, a joint venture between Saudi Aramco and Dow Chemical, posted a 34% revenue gain in the second quarter compared with a year earlier, thanks to a 26% increase in volumes sold, Sadara Basic Services said in an Aug. 11 statement on behalf of its parent company Sadara.

The increase in volume sold was due to completion of periodic scheduled maintenance in the second quarter of 2023, the company said in a statement to the Saudi stock exchange.

Even though the company's accumulated losses exceeded 100% of share capital as of June 30, Sadara's management "believes that the group will generate sufficient funds to meet its obligations as they become due during the 12-month period beginning from the date of approval of this condensed consolidated interim financial information," it said in the statement.

"The business plans also include commitments from the shareholders to provide financial support to the company," it said. Aramco holds 65% of Sadara, while Dow owns 35%.

An email to Aramco for comment was not returned and Dow did not respond to an email seeking comment outside of business hours.

World's largest

Sadara is one of the largest petrochemical facilities in the world, with 26 integrated manufacturing units in Saudi Arabia's Jubail petrochemicals hub.

The $20 billion joint venture Sadara was formed in 2011 and introduced the first isocyanates and polyols plants in Saudi Arabia that enabled polyurethane foams production. Its plants also produce elastomers, ethylene amines, propylene glycol, butyl glycol ether and solution polyethylene, according to information from the company's website.

On Aug. 7, another petrochemicals company Petro Rabigh in Saudi Arabia reported that its accumulated losses reached 53% of its capital as of June 30. Existing shareholders Aramco and Sumitomo Chemical agreed to Aramco buying more Petro Rabigh shares from Sumitomo Chemical for $702 million, which would be injected into Petro Rabigh, the companies said in an Aug. 7 joint statement. Aramco will provide another $702 million to Petro Rabigh, for a total injection of $1.4 billion.

Through its subsidiaries, including Sadara and Petro Rabigh, Aramco's chemicals production capacity stood at 59.6 million t/year as of Dec. 31, 2023, according to the company's financial results.

Sadara Chemical includes a dual-feed cracker with 1.5 million metric tons/year of capacity, along with its derivative units such as HDPE, with capacity of 75,000 t/year, LDPE with capacity of 350,000 t/year and LLDPE with capacity of 675,000 t/year, according to an analysis by S&P Global Commodity Insights. The company also produces chemical-grade propylene with 400,000 t/y capacity, with its derivative units. Other product streams include mixed C4s and pyrolysis gasoline. Aromatics extraction of the pyrolysis gasoline results in 280,000 t/y of benzene and 134,000 t/y of toluene product streams.