Shell Pens Sale Agreement with SADAF Joint Venture

by Ship & Bunker News Team
Tuesday January 24, 2017

Royal Dutch Shell plc (Shell) Sunday announced that it has signed an agreement to sell its 50 percent stake in SADAF, its petrochemicals joint venture in Jubail, Saudi Arabia, to SABIC for $820 million.

SADAF is noted to include six petrochemical plants with a total output of more than 4 million metric tonnes per year

The newly announced sale is said to mark the early termination of the two companies' joint venture agreement, which was set to expire in 2020.

"Our partnership with SABIC, spanning more than thirty years, has been a great success story. We’re proud to have established together one of the first petrochemical ventures in Saudi Arabia - it has grown substantially since the start, in 1986. We will continue to explore potential future opportunities with SABIC," said Graham van’t Hoff, Executive Vice President Chemicals at Shell.

The acquisition is said to position SABIC to optimise SADAF operations, further investing in the facilities, integrating them with SABICs affiliates.

"Since SABIC’s early days, we have enjoyed a strong relationship with Shell Chemicals.  We are confident that our journey of partnership together will continue and grow in strength," said Yousef Al-Benyan, SABIC Vice chairman and CEO.

"With this transaction SABIC is looking to capitalise on synergy opportunities of SADAF with other affiliates, and improve its operation and profitability."

For Shell, the sale is said to support the company's focus on its downstream activities and the growth of its global chemicals business.

The transaction is noted to be subject to regulatory approval and is expected to be finalised later this year.

Last month, Shell signed an agreement for the sale of its 20 percent shareholding in Vivo Energy - which supplies fuels and lubricants to marine markets, among other activities - for $250 million to Vitol Africa B.V. (Vitol Africa).