Saudi Chemical Holding's subsidiary, Saudi Chemical Company Limited (SCCL), has recently formalized a non-binding memorandum of understanding (MoU) with Dyno Nobel, marking a significant step towards establishing a production facility in Ras Al Khair dedicated to the production of ammonium nitrate and nitric acid. The MoU sets the framework for collaboration, outlining the intentions of both parties in this venture.

The agreement outlines a comprehensive plan that includes the re-verification of the project's preliminary studies and financial model over a six-month duration. During this period, a specialized engineering company will be engaged to develop and present the preliminary designs, which will play a crucial role in the final assessment of the project's feasibility.

SCCL's commitment to the project is evident in its receipt of a gas allocation letter from the Ministry of Energy back in February of the previous year. This allocation serves as a foundational step, providing the necessary resources for the establishment of a cutting-edge facility geared towards the production of nitric acid and ammonium nitrate.

The proposed facility's production capacity is noteworthy, with an annual output of 440,000 tonnes of nitric acid and 300,000 tonnes of ammonium nitrate. These production figures underscore the scale and significance of the project, positioning it as a major player in the chemical manufacturing landscape.

The decision to engage a specialized engineering company for the preliminary designs reflects a commitment to precision and excellence in the project's execution. This strategic move ensures that the project undergoes a meticulous assessment, covering all engineering aspects to guarantee its technical viability and adherence to the highest industry standards.

The collaboration with Dyno Nobel adds a valuable dimension to the project, bringing in expertise and experience in the field. The synergy between SCCL and Dyno Nobel, as outlined in the MoU, is expected to enhance the project's overall capabilities and contribute to its success.

As the project progresses, the collaborative efforts will be critical in addressing challenges, optimizing operational efficiency, and navigating regulatory requirements. The shared commitment to the project's success, evident in the non-binding nature of the MoU, signifies a cooperative approach that allows for flexibility and mutual understanding as the venture unfolds.

The establishment of a production facility for ammonium nitrate and nitric acid aligns with the broader goals of both SCCL and Dyno Nobel. This strategic initiative not only contributes to the growth and diversification of SCCL's portfolio but also underscores the commitment to meeting market demands for these essential chemical products.