SABIC, SAR sign rail transportation services agreement
As part of our social and environmental responsibility to eliminate carbon footprint and reduce congestion on public roads, we signed a rail transportation services agreement with the Saudi Railway Company (SAR) for container movement.
Minister of Transport Saleh Nasser Al-Jasser, and SABIC’s Chairman Khalid Hashim Aldabbagh, our CEO and Vice Chairman Yousef Al-Benyan, CEO of Saudi Railway Company Dr. Bashar Al-Malik, among others, attended the signing ceremony at our headquarters in Riyadh.
As part of the agreement, SAR will transport our polymer products by rail from the Portside Logistics Facility (PLF) Handover Point to the Dammam Port Handover Point and from Empty Container Yard Handover Point to PLF.
SABIC Global Supply Chain (GSC) along with SAR will perform an evaluation reaching an agreement on a non-binding basis. Rates are fixed for 10 years with a positive business case for SABIC. The business case is proven to be feasible with a high internal rate of return, cost-saving, operational added-value and sustainability with 70% fuel saving and CO2 reduction.
“The project will support the Saudi Vision 2030 by providing safe, reliable, fast, and environmentally-efficient transportation solutions for local industries,” said Al-Benyan.
“The agreement, which initially covers polymer products, is the first milestone in our journey. At a later stage, the scope of the agreement will be expanded to cover all other SABIC products,” he added.
“The agreement fulfills our social and environmental responsibility to reduce the carbon footprint as rail transportation will eliminate around 5,000 MT of CO2 emission,” said Abdulrahman Al-Fageeh, Executive Vice President, Petrochemicals.
“As part of our social and environmental responsibility, we want to reduce congestion on public roads. With this agreement, more than 300,000 truck trips will be eliminated from roads,” he added.
Our Global Supply Chain has been working with SAR on several projects to fulfill SABIC’s requirements and ensure rail network readiness to meet the company’s plans.
The agreement for the Dammam-PLF-Dammam rail connection for container movement is one of the main on-going engagements with SAR. The SABIC-SAR agreement extends for 25 years to transport polymers in 375,000 TEUs.