Dubai (Platts)--12Nov2012/842 am EST/1342 GMT

Saudi Basic Industries Corp (SABIC) and Shell Chemicals are planning expansion projects at their Sadaf joint venture petrochemical complex and are also exploring investment opportunities outside Saudi Arabia, the companies said in separate statements Monday.

Sadaf is a 50:50 joint venture that SABIC and Shell formed in the early 1980s. It produces 4.7 million mt/year of petrochemicals, including ethylene, ethanol, styrene monomer, ethylene dichloride, caustic soda, and methyl tertiary butyl ether at the Al Jubail site in Saudi Arabia.

The companies will conduct a study for a new styrene monomer propylene oxide (SMPO) and polyols project, Riyadh-based SABIC said in a filing to the Saudi stock exchange Tadawul.

In a separate statement, Shell said it and SABIC are "progressing plans for the expansion of various projects" at Sadaf.

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They are developing a "full range of polyols and SMPO plants" at the Sadaf site and the studies to implement this plan are currently underway, it added.

"The proposed full range of polyols and SMPO plants would be the first of their kind in the Middle East. The assets would employ Shell's proprietary polyols and SMPO technologies to produce chemical building blocks for the polyurethanes industry and petrochemicals sector in the Middle East and beyond," Shell said.

The expansion projects aim to respond to increasing demand from the construction, transportation, sports goods, food packaging, and home appliances industries, it added.

The two did not disclose details on production capacity or the expected cost of the project.

The companies also confirmed they are exploring opportunities outside Sadaf and Saudi Arabia.

They said this plan will "build on their strong long-term relationship" of more than 30 years.

"The two companies will in due course announce any further major updates regarding their partnership," SABIC said.

No other details were provided. Shell declined to comment further when contacted by Platts.

--Shashank Shekhar, shashank_shekhar@platts.com
--Monicca Egoy, monicca_egoy@platts.com
--Edited by Jeremy Lovell, jeremy_lovell@platts.com

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