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Saudi Arabia Petrochemicals Report Q4 2011
Business Monitor International, Sep 2011, Pages: 68
Business Monitor International's (BMI) Saudi Arabia Petrochemicals Report (Q4 2011) provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Saudi Arabia's petrochemicals industry.
By 2015, BMI forecasts ethylene and propylene capacities will rise to 16.52mn tpa and 6.55mn tpa respectively, with Saudi Kayan’s commercial operation in 2011 set to contribute most to the increase, according to BMI’s latest Saudi Arabia Petrochemicals Report.
Compared with 2010, total PE capacity will rise 20% to 8.86mn tpa, PP will rise 11% and PS, PET and PVC capacities will remain unchanged. Ethylene capacity in 2015 is forecasted to be more than double that of 2008 levels, with Jubail and Yanbu the focus of petrochemicals developments. BMI’s projections for petrochemical capacity are based on planned projects, but it is possible that some may not come to fruition as a result of the restriction on ethane feedstock and a possible lacklustre recovery in the Chinese market – at a time of rising Chinese capacities. Due to the integrated nature of the megaprojects under development, any delay further up the supply chain will cause delays in downstream developments.
Technical problems at Sahara Petrochemicals’ Al-Waha plant and at Petro Rabigh have adversely affected PP output. The temporary closures did not affect supplies, which were maintained through inventories, although BMI expected a negative impact on profitability at the respective plants. On the upside, NatPet resumed operations at its Yanbu-based 400,000tpa PP complex after completing a scheduled maintenance 11 days before the 60-day turnaround was due to be completed. The scheduled maintenance aimed to increase the operational rate of the complex, which was started in August 2010 but experienced two shutdowns in H111 due to technical problems and power outages, causing losses of more than US$11mn.
JVs are being established to build and operate units aligned with Saudi Arabia’s National Industrial Clusters Development Program, which aims to expand and diversify its manufacturing sector and create opportunities in downstream industries such as construction, automotive, electronics, medical technologies and appliances. Favoured projects for feedstock allocation are increasingly those with the potential to diversify and strengthen the country’s economy and create jobs. Sabic also seeks to use its basic petrochemicals projects as raw material for processing.
The recent decision by Dow Chemical and Saudi Aramco to go ahead with the integrated US$20bn Sadara Chemical Company JV complex will significantly boost downstream chemicals growth going forward. The complex will include a cracker with capacities of 1.5mn tpa ethylene and 450,000tpa propylene with feed comprising 55% ethane and 45% naphtha and will produce more than 3mn tpa of high value-added chemical products and performance plastics, including amines, glycol ethers, propylene glycol, polyether polyols, isocyanates and solution process LLDPE, LDPE and elastomers. BMI believes it unlikely that the target completion date of 2015 will be reached. The complex is envisaged to sustain downstream industries, such as wire and cable, packaging, automotive parts and consumer products.
Similar projects were announced in mid-2011, largely directed as capitalising on the growth in the Asian automotive industries, particularly tyres. Kemya has also announced plans for an elastomers complex that will be built at the Kemya site. The complex will have capacity to produce more than 400,000tpa combined of butyl rubber, styrene butadiene rubber (SBR), butadiene rubber, ethylene propylene diene monomer rubber, thermoplastic specialty polymers, and carbon black. Meanwhile, Sahara Petrochemicals and Saudi Arabian Mining Company (Ma’aden) is going ahead with a US$750mn project at Jubail with capacities of 250,000tpa caustic soda and 300,000tpa EDC. Sabic and Mitsubishi Rayon have announced a new JV company to build and operate plants with methyl methacrylate (MMA) and polymethyl methacrylate (PMMA) capacities of 250,000tpa and 40,000tpa respectively. The proposed Saudi Japanese Acrylonitrile Company (Shrouq), a JV between Sabic, Asahi Kasei and Mitsubishi Corporation, will build and operate plants with capacity for 200,000tpa of acrylonitrile and 40,000tpa of sodium cyanide in Jubail.
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