April 10 (UPI) — French energy company Total said Tuesday it signed a memorandum of understanding to invest $9 billion on a petrochemical complex in Saudi Arabia.
Saudi Crown Prince Mohammed bin Salman is leading a delegation, including Saudi Oil Minister Khalid al-Falih, through Europe to drum up business in the kingdom. While in Paris, delegates signed an agreement with Total to build a complex next to the giant Jubail refinery.
Both sides said they’d present design work on the project by the third quarter. All told, the French company said $9 billion will be invested through the memorandum.
“This project will enable us to strengthen our ties with Saudi Aramco, with whom we successfully operate our biggest and most efficient refinery in the world,” Total Chairman and CEO Patrick Pouyanné said in a statement. “Finally, it will contribute to the Vision 2030 of the kingdom by creating 8,000 jobs and bringing in new high-added-value technologies.”
An economic agenda, dubbed Vision 2030, aims to boost Saudi Arabia’s non-oil revenue and relies in part on raising money through the public listing of shares in the Saudi Arabian Oil Co., known also as Saudi Aramco. Billed as the largest-ever IPO, the offering could value the company at $2 trillion.
Financial services company ING said the offering “is a bellwether for Saudi Arabia’s push away from a heavy dependence on oil.”
The French agreement is part of a growing list at Saudi Aramco. Memoranda were signed in New York between Saudi entities and drilling services companies Baker Hughes, Halliburton and Schlumberger. A separate agreement with defense contractor Raytheon extends into cybersecurity, while joint research projects are envisioned between Saudi Aramco and the Center for Strategic and International Studies. The U.S. agreements are worth a combined $10 billion.
On the agreement with Total, Saudi Aramco said the move could help solidify a position in the Asian markets in particular.
“This project illustrates our strategy of maximizing the integration of our large refining and petrochemical platforms and of expanding our petrochemical operations from low-cost feedstock, to take advantage of the fast growing Asian polymer market,” Saudi Aramco President and CEO Amin Nasser said.