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August 5, 2011 3:57 PM

$20 Billion Saudi Joint Venture a Boon to Shearman, White & Case

Posted by Tom Huddleston Jr.

The Dow Chemical Company and Saudi Arabian Oil Company (Saudi Aramco) have launched a joint venture to build a $20 billion petrochemical plant in Jubail, Saudi Arabia.

The companies' respective boards have already approved the deal--which was announced July 25--to create what will be known as the Sadara Chemical Company. Construction of the Sadara complex, envisioned as one of the world's largest facilities for integrated chemicals, is to begin immediately and slated to begin production by the second half of 2015. The companies expect the project to be fully operational by 2016.

Once finished, the complex will be able to produce more than 3 million metric tons of high-value-added chemical products and performance plastics--including polyurethanes, propylene oxide, and elastomers. The companies predict the project will yield annual revenues of $10 billion within a few years of operation.

Shearman & Sterling is representing longtime client Dow Chemical in the venture. The firm's past work for Midland, Mich.–based Dow Chemical includes representing the company on a $17.4 billion joint venture with Petrochemical Industries Company of Kuwait in 2008. Shearman also announced last week that it is advising Dow on the divestiture to Braskem of its global polypropylene business, with M&A partner George Casey leading on that $323 million transaction.

The Shearman team on the Sadara transaction includes project development and finance partners Nick Buckworth and Ben Shorten. Joining them are finance partners Iain Elder and Brian Clayton, along with counsel Gregor Page.

Buckworth said in a statement provided by the firm that Saudi Arabia is "a vitally important market for Shearman & Sterling, and our involvement with Sadara is critical to our success there."

Dhahran-based Saudi Aramco has hired White & Case as counsel to handle its end of the joint venture, the firm said Friday. White & Case's project development team on the matter is led by New York partner Wendell Maddrey and Beijing partner Steve Payne. The group also includes partners Saul Daniel, Sean Wang, Ellis Baker, Jean Shimotake, Adam Chernichaw, Waleed Al-Nuwaiser, Charles-Henri Arminjon, and Antoine Cousin.

White & Case's project finance team is led by London partners Philip Stopford and Tom Bartlett, and also includes New York partner John Lillis.

In 2006, White & Case advised Saudi Aramco on a $9.9 billion project financing for a refinery and petrochemical complex in Rabigh, Saudi Arabia.

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