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Ineos Plans $2 Billion Spending on Saudi Arabia Chemical Plants

Oil prices

(Bloomberg) – Ineos plans to spend $2 billion to build three chemical plants in Saudi Arabia as the group controlled by U.K. billionaire Jim Ratcliffe enters the Middle East for the first time.

The factories will be part of a $5 billion petrochemical complex state-run Saudi Aramco and France’s Total SA are constructing in the kingdom, Ineos said in a website statement. The British company has been growing with acquisitions of oil and gas fields and a major pipeline in the U.K., chemical facilities in China, and investments in plants in Belgium and the U.S.

Ratcliffe, 66, a former Exxon Mobil Corp. executive, built Ineos by acquiring unwanted petrochemical assets from major oil companies. The group has also dipped its toes in fashion, soccer, car-making and a cycling team over the years. With the planned Saudi investment, it’s expanding its core business of chemicals.

Ineos signed a memorandum of understanding with Saudi Aramco and Total to build the three plants as part of the Jubail 2 complex, according to the statement. The deal includes a plant to manufacture acrylonitrile, a chemical used to make certain types of plastics. It will also build a facility for linear alpha olefins and associated poly alpha olefin, used to produce lubricants. All three are due to begin production in 2025.

Oil companies are increasingly betting on petrochemicals to drive future demand growth as the world grows seeks to tackle emissions from gasoline and diesel vehicles. Saudi Aramco, the world’s biggest crude producer, bought a majority stake in local chemical giant Sabic for about $69 billion this year.

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