Saudi Basic Industries Corp (SABIC) is considering listing National Industrial Gases Company (GAS) as part of a review into the strategic options for its unit, the Saudi chemicals giant said on Wednesday.
The study and evaluation of certain strategic options concerning the National Industrial Gases Company is in line with SABIC’s priorities of optimizing its portfolio and focusing on its core business, said the company, which is 70% owned by Saudi state oil giant Aramco.
The options under consideration for National Industrial Gases Company include an initial public offering, with the aim of “enhancing its financial position and the value added for shareholders,” SABIC said.
“If a decision is made to proceed with the IPO, it will be subject to obtaining the relevant approvals, including regulatory approvals, and prevailing market conditions,” SABIC said.
The potential IPO of the unit comes as SABIC and other major chemicals producers have seen reduced profitability in recent months amid rising input costs and weaker demand.
For the first quarter of 2025, SABIC reported a net loss of $320 million (1.2 billion Saudi riyals).
SABIC’s chief executive, Abdulrahman Al-Fageeh, cited “the slowdown in the global economy and the continued uncertainties that negatively affected the markets, saying that these are some of the reasons for the decline in demand for petrochemical products.”
“The oversupply of petrochemicals continues to pressurize product prices and, in turn, profit margins,” Al-Fageeh said in May.
Weaker profits – and payouts to the Kingdom – at SABIC’s majority shareholder, Aramco, have also reportedly prompted the Saudi state oil giant to consider selling up to five gas-fired power plants in deals that could raise some $4 billion.
Saudi Aramco is reportedly exploring asset sales as a means of increasing the availability of funds to fuel its international expansion and existing operations, according to unnamed sources who spoke to Reuters in May.
By Tsvetana Paraskova for Oilprice.com
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