Dow and the Al-Hejailan Group have signed a Memorandum of Understanding (MoU) to form a joint venture to design, build and operate a methyl diethanolamine (MDEA) plant in the PlasChem Park in Jubail. The joint venture will enable Dow and Al-Hejailan to meet the growing demand for natural gas purification in Saudi Arabia and the broader Middle East region.
“Saudi Arabia is a significant player in both the regional and global petrochemicals market, with further growth expected in the coming years. We are therefore delighted to sign this agreement with Dow, as it aligns with our group’s strategy of participating in the downstream industry,” said Faisal J. Al-Hejailan, CEO Al-Hejailan Group. “We also appreciate and recognize the leading efforts of the Ministry of Energy & the Royal Commission in allowing the multiple components of Saudi Arabia’s industrial base to work together to deliver on Vision 2030 in general, and this Al-Hejailan-Dow agreement in particular.”
The new capacity will help meet growing customer demand for natural gas purification in the Middle East region
“This partnership is a demonstration of delivering solutions that will help advance the energy transition,” said Howard Ungerleider, President and Chief Financial Officer, Dow. “We are excited for this opportunity with Al-Hejailan and appreciate the instrumental support of the Ministry of Energy & the Royal Commission.”
Construction is expected to begin in 2024 with production projected to come online in 2025.
The JV is expected to be built and operated by the Al-Hejailan Group. Under the terms of the agreement, Dow will hold a 25% stake and Al-Hejailan will hold a 75% stake in the joint venture. The facility will utilize Dow’s manufacturing technologies, and Dow will be responsible for the marketing of the plant’s production of MDEA. The construction of the plant is expected to begin in 2024 and come online in 2025.
JV to provide raw materials to the new Dow facility which will enable growth in high-performance gas treating derivatives
In addition to the joint venture, Dow will also build a Dow-owned downstream manufacturing facility which will source raw materials from the new JV. This new facility will expand the capacity of the company’s MDEA-based high-performance UCARSOL™ products and will also blend Dow’s ACCUTRACE™ fuel markers for the region. This investment will position Dow to further enable local solutions for the energy transition, including delivery of industry-leading gas treating, carbon capture, and fuel additive technology to the region. The facility is expected to come online in late 2024.
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