Rabigh Refining and Petrochemical Company (Petro Rabigh) has signed a memorandum of understanding (MoU) with China’s Jiahua Chemicals to explore the establishment of a specialty chemicals manufacturing plant in Rabigh, according to the several media reports. The facility will focus on producing specialty chemicals derived from ethylene oxide and propylene oxide, which are essential for the construction and automotive industries, according to a statement released to the Saudi stock exchange on Tuesday.

Petro Rabigh will supply the key materials needed for the new project, ensuring a consistent source of essential inputs. The MoU is set to last for 12 months, providing both parties with adequate time to conduct feasibility studies and outline the operational framework for the proposed plant.

This collaboration aligns with Saudi Arabia’s broader strategy to enhance domestic production of specialty chemicals. The initiative aims to reduce reliance on imports while supporting downstream industries related to construction and automotive sectors. By increasing local manufacturing capabilities, the project is expected to contribute to the kingdom's economic diversification efforts and create job opportunities.

Leveraging Petro Rabigh’s resources and Jiahua Chemicals' expertise in specialty chemicals, the project has the potential to drive significant advancements in the sector. The establishment of this facility is poised to strengthen the local supply chain and meet the growing demand for specialty chemicals, which are vital for various applications within the construction and automotive fields.

The agreement also underscores the importance of collaboration between local and international companies in achieving the kingdom's industrial objectives. The partnership with Jiahua Chemicals not only enhances Petro Rabigh's production capacity but also fosters knowledge transfer and technological exchange. This could lead to more innovative solutions tailored to the specific needs of the Saudi market.

Rabigh Refining & Petrochemical Company (Petro Rabigh) was established in 2005 as a joint venture between Saudi Aramco and Sumitomo Chemical. The plant has an estimated value of approximately SAR 16.71 billion, with 25% of the funding coming from the public and the remaining amount equally shared between Saudi Aramco and Sumitomo Chemical. Initially, it produced 18.4 million tons per annum (MTPA) of petroleum-based products, along with 2.4 MTPA of derivatives based on ethylene and propylene.

Petro Rabigh's products find applications in a variety of end products, including plastics, detergents, lubricants, resins, coolants, antifreeze, paints, carpets, ropes, clothing, shampoos, automotive interiors, epoxy adhesives, insulation, films, fibers, household appliances, packaging, candles, pipes, and many other uses.

Petro Rabigh II is an expansion initiative valued at $9 billion, which achieved full production by the fourth quarter of 2017. This project introduced a diverse range of new high value-added products, some of which are exclusive to the Kingdom of Saudi Arabia and the broader Middle East region.