RIYADH, (Reuters) – Saudi Basic Industries Corp. (SABIC) aims to develop chemical projects with state-owned Saudi Aramco, Saudi Arabia’s al-Riyadh newspaper reported on Wednesday, citing SABIC’s chief executive.
“We aspire to the emergence in the very near future of an alliance between Aramco and SABIC in the petrochemicals industry,” Mohamed al-Mady said, according to the newspaper. The newspaper did not give details.
Mady declined to comment when Reuters called him.
SABIC and state-owned Saudi Arabian Mining Co. last month agreed to work together to develop a $3.5 billion phosphate project in the Saudi kingdom, a deal Mady referred to in the newspaper interview.
Aramco has agreed to several petrochemical joint ventures with foreign companies including Japan’s Sumitomo Chemicals, raising concern this will hurt state-controlled SABIC, the world’s largest chemical company by market value.
Mady said global supplies of chemicals would balance demand through 2008, sustaining prices, according to the newspaper.
“Right now, there is balance between supply and demand. Also prices are good for producers and demand is high, especially for fertilisers, steel and some petrochemical products,” he said.
“But expectations are for a growth in supply with new capacities starting production by the start of 2009,” he said.