Jubail & Yanbu Review 2019

Halliburton starts Jubail plant work

Halliburton has started construction of a chemical plant in the Jubail chemical complex in Saudi Arabia that will produce chemicals needed by Saudi Aramco, contributing to Saudi Arabia‘s efforts to expand downstream operations.

"The new facility, expected to be operational by the end of 2020, will be the first specialty oil field chemicals manufacturing reaction plant in Saudi Arabia," Saudi Aramco says in a release.

"These types of projects will transform Saudi Arabia from being an importer of specialty products to an exporter," says Saudi Aramco senior vice president of Upstream, Mohammed Y. Al Qahtani.

"As the kingdom continues to expand and diversify its economy in line with Saudi Vision 2030, it is projects like this that brings this vision to reality. These types of projects will transform Saudi Arabia from being an importer of specialty products to an exporter," he added.

Halliburton will manufacture process treatment chemicals at the facility, which in turn will be sold primarily to Saudi Aramco for use in upstream drilling and extraction activities as well as in downstream, the statement says.

The plant is being built by Halliburton at the ethylene oxide/propylene oxide cluster of a chemical plan area in Jubail.

Production will be fueled by a steady supply of ethylene oxide and propylene oxide from the Sadara field through a pipeline network currently under construction. The network, comprising 4.4 miles, will distribute the feedstocks for petrochemicals to multiple customers once completed in 2020.

Fluor announced that it was awarded the engineering, procurement and construction of the Halliburton Specialty Chemicals Manufacturing Reaction Plant in Jubail.

"Upon the plant‘s completion in 2020, Halliburton will begin local manufacturing of specialty chemicals to help customers achieve production and reliability goals in applications from the reservoir to the refinery," Halliburton says in a press release at the time.

Saudi Arabia is trying to build its downstream business, including petrochemical production, in part to reduce vulnerability to declines in crude oil prices. Having a more balanced company with more assets in the downstream would lead to better results in an initial public offering, Saudi Arabian officials have says.

Saudi Arabia reportedly has plans to carry out an initial public offering for Saudi Aramco in 2021.

Plans for an IPO in 2018 were delayed to help balance the company assets so that it won‘t rely as much on the upstream.

While Aramco is the world‘s largest company in the upstream, with production of about 14 million barrels of oil equivalent per day and 260 billion barrels of oil, as well as 300 trillion cubic feet of gas as reserves, the downstream needs development, Aramco officials have said in the past.

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