Saudi Basic Industries Corporation (SABIC) has extended its partnership agreement with Japan Saudi Arabia Methanol Co., the Saudi petrochemicals’ giant said in a bourse filing.
SABIC said it will buy a 25 percent stake in Saudi Methanol Co. (Ar-Razi) from Japan Saudi Arabia Methanol Co. (JSMC) for $150 million.
SABIC will now own 75 percent of Ar-Razi, while the remaining 25 percent is owned by JSMC.
SABIC will also extend partnership with JSMC on Ar-Razi for 20 years, and JSMC will pay SABIC $1.35 billion for the extension deal.
The Saudi petrochemicals’ giant will utilize some or all of the deal proceeds to finance the refurbishment of or replacement of Ar-Razi’s existing methanol plants.
JSMC has the right at any time prior to March 31, 2019 to sell its remaining 25 percent stake in Ar-Razi to SABIC for $150 million.
The deal is expected to be completed in 2019, and the relevant financial impact will appear in the same year.
JSMC, an equity method affiliate of Mitsubishi Gas Chemical Company (MGC), and SABIC had started in 1980 the fifty-fifty methanol operations joint venture through a newly established Ar-Razi.
The joint operation agreement on Ar-RAZI is scheduled to be expired on Nov. 29, 2018.
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