Advanced Petrochemical Company, a petrochemical manufacturing firm based in Saudi Arabia, has apparently revealed in its recent announcement that it has inked a contract with South Korea’s PolyMirae to construct a polypropylene facility worth USD 420 million. As per reliable sources, the South Korean subsidiary of Advanced Chemical would set up a joint venture with PolyMirae to build the new plant in South Korea.

For the record, South Korea, of late, has been active in developing petrochemical projects in the Arabian Gulf. The nation is regarded as the fourth largest economy in Asia and is one of the top importers of crude oil from the Middle East.

Sources familiar with the development claim that the total valuation of the project is anticipated to be financed by both the firms through 60% of commercial debt and the remaining amount would be made available by equity contributions. As per the statement filed by Advanced Petrochemical to the Saudi Stock Exchange, the latest facility would be equipped with a capacity of producing 400,000 tons of propylene.

Reportedly, the South Korean chemical subsidiary of Advanced Petrochemical, SK Advanced, is itself a joint venture in which it owns 30% stake via its investment firm along with Kuwait’s Petrochemical Industries Company and South Korea’s SK Gas. It is being said that SK Advanced would command approximately 49.99% ownership of the new facility.

For the record, SK Advanced has been operating in South Korea since 2016 with its propane de-hydrogenation manufacturing plant of 600,000 tons capacity.

Subject to final investment decisions, the new joint venture is expected to break ground on the facility in January next year. According to trusted sources, the financial impact of the deal would be visible post the official commencement of the commercial operation of the facility in the year 2021.