Saudi Kayan to save SAR600 mln yearly on new agreement

Saudi Kayan Petrochemical Co. signed an agreement on Thursday with Saudi Basic Industries Corporation (SABIC) and the kingdom’s petroleum ​ministry to boost its yearly ​financial resultsby SAR 600million

​ Upon completing scheduled projects based on current price forecasts and production levels, said Omar bin Abdullah Al Amoud, chairman of Kayan.

​The deal will boost the company's financial results by SAR 280 this year alone, Kayan said in a statement to Tadawul, Saudi Arabia’s bourse.

Kayan said the agreement stipulates that the ministry will allocate for the company an additional

 10 million cubic feet a day (scfd) of ethane starting July.

This comes as part of Saudi Kayan’s debottlenecking project to raise ethylene production capacity by at least 93,000 TPA and ethylene oxide capacity by 61,000 TPA by second quarter 2017.

The additional ethane supply will also allow the company to reduce its consumption of butane gas

​.

SABIC will also be able to ​slice its marketing fees by one third as of July 1 based on the deal with the ministry.​

SABIC, the world's largest petrochemicals producer, currently ​owns a 35 percent stake in Saudi Kayan.