Two weeks ago, the com­pa­ny Sau­di Ba­sic In­dus­tries Cor­po­ra­tion (SABIC) was an un­known en­ti­ty in these parts. To­day, that com­pa­ny is very much part of the T&T en­er­gy land­scape, as it looks to con­struct and op­er­ate a methanol to petro­chem­i­cal com­plex and a plant that would con­vert methanol to olefins, a syn­thet­ic fi­bre used to make wall­pa­per, ropes, and ve­hi­cle in­te­ri­ors. This is a very big deal: US$5.3 bil­lion. This project is al­ready mired in con­tro­ver­sy. For­mer en­er­gy min­is­ter Car­olyn Seep­er­sad-Bachan locked horns with her suc­ces­sor, Kevin Ram­nar­ine, over the price the Saud­is were propos­ing to pay for nat­ur­al gas. The Unit­ed States, which sent a let­ter last week to Prime Min­is­ter Kam­la Per­sad-Bisses­sar, speak­ing of its "ro­bust com­mer­cial re­la­tion­ship" with T&T. US in­ter­ests have ob­ject­ed to be­ing un­fair­ly by­passed in favour of the Sau­di com­pa­ny.

One of the US's ar­gu­ments is that sev­er­al US com­pa­nies op­er­at­ing in T&T have con­tributed to de­vel­op­ing this coun­try's en­er­gy sec­tor through in­no­v­a­tive tech­nol­o­gy and fi­nanc­ing of new projects.

The Amer­i­can Cham­ber of Com­merce of T&T (Am­Cham) states that of its 300 pri­vate sec­tor mem­ber­ship com­pa­nies, 25 per cent are multi­na­tion­al and 75 per cent na­tion­al. "Am­Cham's mem­ber com­pa­nies rep­re­sent over 90 per cent of the for­eign di­rect in­vest­ment in­to T&T and Am­Cham has, in its short 20-year his­to­ry, be­come the de fac­to pre­ferred point of pri­vate sec­tor rep­re­sen­ta­tion for lo­cal, US and multi­na­tion­al com­pa­nies. The US De­part­ment of State's Web site said that US/T&T com­mer­cial ties have al­ways been strong and have grown sub­stan­tial­ly in the last ten years due to eco­nom­ic lib­er­al­i­sa­tion in the 1990s. "US firms have in­vest­ed more than US$1 bil­lion in re­cent years-most­ly in the petro­chem­i­cal, oil/gas, and iron/steel sec­tors. "Many of Amer­i­ca's largest cor­po­ra­tions have com­mer­cial links with T&T, and more than 30 US firms have of­fices and op­er­a­tions in the coun­try. T&T is the lead­ing ben­e­fi­cia­ry of the US Caribbean Basin Ini­tia­tive," stat­ed the US Web site.

There's more.

"The stock of US di­rect in­vest­ment in T&T was US$3.8 bil­lion (book val­ue) as of 2007. To­tal FDI in­flows over the four years, 2004-2007, amount­ed to ap­prox­i­mate­ly US$3.8 bil­lion, al­though for­eign di­rect in­vest­ment (FDI) in T&T has dropped sig­nif­i­cant­ly since 2008. "Among re­cent and on­go­ing in­vest­ment projects are sev­er­al in­volv­ing US firms. Sev­er­al US-brand­ed ho­tel chains have en­tered the mar­ket; most re­cent­ly, a Hy­att-man­aged ho­tel opened in ear­ly 2008, part of a mul­ti­mil­lion-dol­lar wa­ter­front de­vel­op­ment project in Port-of-Spain." As of Feb­ru­ary 9, it would ap­pear that Gov­ern­ment's po­si­tion is clear. En­er­gy Min­is­ter Ram­nar­ine said at a post-Cab­i­net press con­fer­ence at the Diplo­mat­ic Cen­tre, St Ann's, that Cab­i­net agreed to give the Min­istry of En­er­gy the green light to start ne­go­ti­a­tions with a con­sor­tium of Sau­di Ara­bi­an and Chi­nese com­pa­nies on its pro­pos­al to con­struct two petro­chem­i­cal com­plex­es worth US$5.3 bil­lion.

About the Sau­di com­pa­ny...

Ac­cord­ing to Google, Sau­di Ba­sic In­dus­tries Cor­po­ra­tion (SABIC), a glob­al or­gan­i­sa­tion with more than 33,000 in more than 40 coun­tries, was cre­at­ed by roy­al de­cree in the king­dom of Sau­di Ara­bia in Sep­tem­ber 1976. "In al­most every re­spect, the found­ing vi­sion for SABIC went well be­yond cor­po­rate prof­its," the Web site stat­ed. The com­pa­ny pro­duces sev­er­al items in every­day use. The SABIC Web site said its prod­ucts in­clude chem­i­cals, poly­mers, spe­cial­ty plas­tics, fer­tilis­ers and met­als for our cus­tomers in more than 100 coun­tries. "In many ways, we are al­ready part of your life. From the food and drink pack­ag­ing in your fridge to the clothes you wear and the car you dri­ve, our prod­ucts are in­dis­pens­able to 21st cen­tu­ry liv­ing. The com­pa­ny de­scribed it­self as "al­ready among the world's top petro­chem­i­cal play­ers.

"It is our stat­ed aim to be the pre­ferred world leader in chem­i­cals by 2020. SABIC is the world's biggest pro­duc­er of methanol, gran­u­lar urea, mono-eth­yl­ene gly­col, methyl tert-butyl ether (MTBE) and en­gi­neer­ing plas­tics, as well as be­ing a ma­jor glob­al play­er in the man­u­fac­ture of poly­eth­yl­ene, poly­olefins and polypropy­lene. "In Eu­rope, we are a ma­jor pro­duc­er of in­no­v­a­tive plas­tics, chem­i­cals, poly­eth­yl­ene and polypropy­lene from nu­mer­ous man­u­fac­tur­ing sites in the Nether­lands, Ger­many, Italy, France, Spain and the Unit­ed King­dom. The com­pa­ny said that its Wilton, UK-based low-den­si­ty poly­eth­yl­ene (LDPE) plant is the world's biggest of its type. "The LDPE is trans­port­ed to cus­tomers through­out Eu­rope and the rest of the world, where they are turned in­to the plas­tic pack­ag­ing used in every­thing from food to elec­tri­cal goods. A few miles north of Wilton, our pro­duc­tion com­plex at North Tees fea­tures a large-scale aro­mat­ics plant and a hi-tech eth­yl­ene liq­ue­fac­tion fa­cil­i­ty. "There are al­so sub­stan­tial lo­gis­ti­cal fa­cil­i­ties, in­clud­ing ma­jor stor­age ca­pac­i­ty and dis­tri­b­u­tion ser­vices at North Tees. The near­by deep wa­ter com­plex of Tees Port is the thriv­ing base for the com­pa­ny's ship­ping ser­vices dis­trib­ut­ing prod­ucts to cus­tomers around the world.

(find­i­tatsabic.com)

Com­pa­ny seeks US$5.3b methanol project

HOUS­TON: Saudia Ara­bia's SABIC is push­ing for ap­proval to build a US$5.3 bil­lion methanol com­plex in T&T, sources said on Feb­ru­ary 8. A Unit­ed States mar­ket source said SABIC want­ed a Trinidad gov­ern­ment sub­sidy of 85 cents mil­lion met­ric British ther­mal units (mmB­tu) for nat­ur­al gas to sup­ply the project, which made its bid "a long shot." That works out to rough­ly 35 per cent of Feb­ru­ary 8's clos­ing US Hen­ry Hub nat­ur­al gas price of US$2.44 mmB­tu. "It will be looked at, but it's not vi­able," the source said of SABIC's bid. Re­ports in a Trinidad news­pa­per out­lined the deal, which would al­low SABIC to build a methanol-to-petro­chem­i­cals and methanol-to-olefins com­plex at the Pt Lisas in­dus­tri­al es­tate. The project's dai­ly nat­ur­al gas re­quire­ment would be 265 mil­lion cu­bic feet, ac­cord­ing to the Trinidad Guardian.

SABIC wants a gas con­tract priced 36 per cent cheap­er than what the state-owned Na­tion­al Gas Com­pa­ny (NGC) pays for nat­ur­al gas from its sup­pli­ers, ac­cord­ing to a re­port on Feb­ru­ary 6 in the Guardian. Trinidad en­er­gy min­is­ter Kevin Ram­nar­ine said that SABIC's bid for the gas was not fi­nal, ac­cord­ing to the news­pa­per. Cab­i­net mem­bers de­bat­ed var­i­ous facets of the project, in­clud­ing the gas is­sue, the news­pa­per said. Ram­nar­ine and oth­er of­fi­cials in the en­er­gy min­istry could not be reached im­me­di­ate­ly on Wednes­day. SABIC spokes­woman Jo­di Kennedy Gaffey did not re­ply to emails ask­ing about the com­pa­ny's plans in Trinidad.

(icis­news.com)

ICIS is the world's largest petro­chem­i­cal mar­ket in­for­ma­tion provider, and has fast-grow­ing en­er­gy and fer­tilis­er di­vi­sions.

...sources US$2.68b for Chi­na project

SABIC an­nounced on Jan­u­ary 18 the sign­ing in Bei­jing of fi­nanc­ing agree­ments by its af­fil­i­ate Sinopec­SABIC Tian­jin Petro­chem­i­cal Com­pa­ny Ltd, to­talling US$2.68 bil­lion, in­clud­ing US$1.8 bil­lion long-term fi­nanc­ing, plus an ad­di­tion­al US$880 mil­lion in work­ing cap­i­tal fa­cil­i­tiesto fi­nance its petro­chem­i­cal com­plex in Tian­jin, Chi­na, that is owned joint­ly by SABIC and Sinopec. The two com­pa­nies formed Sinopec­SABIC Tian­jin Petro­chem­i­cal Com­pa­ny Ltd (SST­PC) in No­vem­ber, 2009, as a 50/50 joint ven­ture to build and op­er­ate the new petro­chem­i­cal com­plex. Khaled Al-Mana, SABIC ex­ec­u­tive vice-pres­i­dent, poly­mers, and chair­man of SST­PC, signed the fi­nancin­ga­gree­ments on be­half of SST­PC.

The fi­nan­cial pack­age in­clud­ed fi­nanc­ing by lead­ing Chi­nese banks and fi­nan­cial in­sti­tu­tions, in­clud­ing Chi­na Con­struc­tion Bank act­ing as the agent, In­dus­tri­al and Com­mer­cial Bank of Chi­na (served al­so as fi­nan­cial ad­vis­er), Bank of Chi­na, Chi­na De­vel­op­ment Bank, the Agri­cul­tur­al Bank of Chi­na, and Sinopec Fi­nance Com­pa­ny. Mut­laq Al-Mor­ished, SABIC ex­ec­u­tive vice-pres­i­dent, cor­po­rate fi­nance, not­ed, "This loan fa­cil­i­ty arranged through the Chi­nese banks and fi­nan­cial in­sti­tu­tions, rep­re­sents fur­ther di­ver­si­fi­ca­tion of our fi­nanc­ing ca­pac­i­ty and demon­strates the trust and con­fi­dence these in­sti­tu­tions have in SABIC."Pre-pro­duc­tion op­er­a­tions of the new 3.2 mil­lion-ton petro­chem­i­cal com­plex, in­clud­ing a mil­lion-ton eth­yl­ene crack­er and eight ad­di­tion­al down­stream units, has al­so com­menced. (sabic.com)