Oil giant ExxonMobil Corp.’s (XOM) affiliate, ExxonMobil Chemical and Saudi Basic Industries Corp., (SABIC) awarded engineering and design contracts for their joint synthetic rubber project, Kemya, in Saudi Arabia.
The contracts cover front-end engineering and design (FEED) work for the process units of the Kemya project at Jubail on the Gulf coast with U.S. firm Jacobs Engineering Group Inc (JEC) and Japan’s Mitsui Engineering & Shipbuilding. Additionally, Fluor Transworld Services Inc. has also been awarded to execute FEED for the associated support facilities.
Al-Jubail Petrochemical Company (Kemya) is a 50:50 joint venture between SABIC and Exxon Chemical Arabia Inc., a subsidiary of ExxonMobil Chemical and is expected to generate 400,000 metric tons a year of rubber, carbon black and synthetic polymers for domestic as well as international needs. Although SABIC did not disclose the contract values or outline any project schedule, in a separate release ExxonMobil Chemical indicated that it would cost $5 billion.
The technology for the facility has been licensed from Goodyear Tire and Rubber Company (GT) and Continental Carbon Company. Additionally, a technology development and marketing was dealt out to Continental Carbon Company for carbon black produced at the planned plant.
Saudi Basic Industries Corporation is the world’s fifth largest petrochemicals company, engaged in the production of polypropylene, polyethylene and other advanced thermoplastics, glycols, methanol and fertilizers.
Irving, Texas-based ExxonMobil Corporation, the world’s largest publicly traded oil company, remains occupied in the exploration and production of oil and natural gas, refining and marketing of petroleum products, manufacturing of chemicals, and other energy-related businesses. Its major competitors are Chevron Corp. (CVX) and ConocoPhillips (COP).
ExxonMobil currently holds a Zacks #2 Rank, which is equivalent to a short-term Buy rating. We currently maintain our long-term Neutral recommendation for the company.
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