Sabic Review

Projects on the anvil

Riyadh is hoping that building downstream facilities will attract global car-makers such as Toyota and GM

SABIC, the undisputed champion in the Saudi petrochemicals industry, has a number of projects planned or under way.

A $2 billion elastomer project is a joint venture of Sabic and ExxonMobil Chemical which is being built at the complex of Al Jubail Petrochemical Co (Kemya). The project will produce about 400,000 tpy of carbon black, rubber and thermoplastic speciality polymers.

ExxonMobil is providing the technology and the products will be sold to local and international markets. Carbon black is used by the automotive industry to add strength to plastic and rubber products.

Another project is Sabic’s methyl methacrylate (MMA) venture with Mitsubishi Rayon subsidiary Lucite. The Alpha-2 joint venture will have a 250,000- tpy MMA plant built in the kingdom. The plant is to be on stream in early 2014. About 80 per cent of the MMA will be used in the construction and automotive industries.

Riyadh is hoping that building downstream facilities will attract global car-makers such as Toyota and the General Motors to set up vehicle assembly factories in Saudi Arabia. It is not just Saudi Aramco and Sabic which are developing downstream projects. Many of the kingdom’s private petrochemical companies are expanding.

Sabic affiliates are increasing polyolefin and polymer production, including a propane dehydrogenation (PDH) plant at I billion Zahr, and a polyethylene terephthalate (PET) plant at Sharq.

Sabic has a 50:50 joint venture with Sinopec in China, which has raised the firm’s output by about 3.2 mtpy. Their joint venture’s $3 billion complex at Tianjin, in north-eastern China, was completed in first week of October 2009. The complex produces basic plastics, including PE and PP; EG used in the production of polyester fibres; and butadiene, phenol, and butene, used in production of polycarbonate.

China is an important market for fuels and chemicals, with Aramco having an integrated refining and olefins complex built at Fujian in a joint venture involving ExxonMobil and Sinopec. The 160,000 barrels per day (bpd) expansion at the Fujian refinery began full operations in late 2009.

The Saudi Arabian General Investment Authority (Sagia) has processed about $90 billion in investment in the kingdom’s petrochemicals industry. This is nearly a third of the $270 billion for the kingdom’s power generation, petrochemicals and water desalination.

Arabian Petrochemical Co (Petrokemya), a 100 per cent owned Sabic unit, has the Gulf region’s first acrylonitrile butadiene styrene (ABS) plant built at its Jubail olefins complex, with a capacity of 200,000 tpy on stream since mid-2011.

This consists of a polybutediene plant, a latex unit, a higher rubber graft facility, a styrene acrylonitrile plant and an ABS compounding unit. Process technology for the project was supplied by Sabic Innovative Plastics, formerly known as GE Plastics, which Sabic acquired in 2007. Butadiene, acrylonitrile and propylene feedstock for the facility are sourced directly from Petrokemya.

Petrokemya went on stream in Jubail in 1985. Its product range and capacities have been expanded since then to include: 1.95 mtpy of ethylene; 100,000 tpy of polystyrene; 70,000 tpy of benzene; 70,000 tpy of butadiene; 100,000 tpy of butene-1; and varying quantities of vinyl chloride monomer (VCM) and styrene.

The Phase-5 expansion of the Ar Razi’s methanol complex at Jubail started up in June 2008, making it the world’s largest chemical methanol production facility. The $600 million plant, built by Mitsubishi Heavy Industries (MHI), added 1.7 mtpy of capacity at the complex, bringing its total output to 4.7 mtpy.

Set-up in 1979, Ar Razi is a 50:50 joint venture of Saudi Methanol Co, a consortium of major Japanese companies led by Mitsubishi Chemical Gas Co and Sabic, which is now the world’s second largest methanol producer. Methanol, most often derived from methane, is commonly used as a feedstock to produce other chemicals such as formaldehyde.

All of Sabic’s plants at Jubail and Yanbu keep raising capacity or are having their output streams diversified. Their plants are mostly joint ventures between Sabic and foreign firms. Sabic and partners in Jubail and Yanbu produce more than 45 kinds of petrochemicals and other products.

Saudi Petrochemical Co (Sadaf), a Sabic-Shell joint venture in Jubail, has re-launched its 600,000 tpy styrene plant. The project was postponed in early 2005 because of rising costs. Project costs have been falling steadily since the autumn of 2008.

Sadaf produces more than 1 mtpy of styrene. Its products include styrene monomer, ethylene dichloride, caustic soda, ethanol and MTBE. Now Sadaf is to produce polyurethane building blocks and styrene monomer propylene oxide (SMPO), the first in the Middle East.

Farabi Petrochemicals Co plans to produce a similar mix of chemicals at its proposed new complex at Jizan Economic City (JEC) to the offtake of the plant it operates at Jubail. This will be next to the $7 billion Jizan refinery in the south-west of the kingdom.

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