Advanced subsidiary signs agreements to sell 620,000 mtpa of polypropylene

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Advanced Petrochemical Co.’s wholly owned subsidiary, Advanced Global Investment Co. (AGIC), signed long-term off-take agreements for the sale of polypropylene with three international firms for nearly 620,000 metric ton per annum (mtpa).

Agreements were signed with US-based Vinmar International LLC and Tricon Dry Chemicals LLC for 250,000 mtpa each, and with Japan’s Mitsubishi Corporation for 120,000 mtpa, Advanced said in a statement to Tadawul.

The value of the contracts will be in accordance with marketing fees specified in the agreements, based on prevailing market prices during the term of the agreements.

Contracts are for the sale of polypropylene to be manufactured by Advanced Polyolefins Co. (APOC), the statement said.

The agreements will be effective from the date of commercial operations of APOC until Dec. 31, 2028.

Securing a long-term off-take commitment from the experienced international firms is a significant milestone for the success of this joint venture, the statement said.

It represents confidence in Advanced’s capabilities and expertise and will also help to achieve its long term strategic plans. It will also improve the profitability of Advanced and APOC due to the fair and competitive commercial terms.

In March, Advanced announced the signing of a partnership agreement between AGIC and SK Gas Petrochemical Pte. Ltd. (SKGP), a unit of SK Gas Co. Ltd, to establish APOC, a closed joint-stock firm, according to data available with Argaam.

APOC will build and operate propane dehydrogenation (PDH) and polypropylene (PP) complex with a design capacity of 843,000 metric tons per annum of propylene and 800,000 metric tons per annum of polypropylene in Jubail Industrial City.