JUNE 2003 U.S. - Saudi Arabian Business Council

The Plastics Sector in the Kingdom of Saudi Arabia

The development of Saudi Arabia's plastics industry is part of the country's overall economic diversification program away from oil. Today, the industry, which started with one plastic unit established in 1956, is showing signs of growing sophistication and versatility. Saudi Arabia currently produces and exports a variety of plastic resins, rigid and flexible tubes, floor coverings, plastic film, sanitary ware, and medical and pharmaceutical plastic products. The real turning point for the Saudi plastics sector took place in 1987, when the state-owned
Saudi Basic Industries Corporation (SABIC) started producing plastic resins for the 75 plastics manufacturing units then operating in the Kingdom. SABIC and its manufacturing network, consisting of 19 world class industrial complexes operated by 16 affiliates, is now the source of raw materials for over 700 chemical and plastics processing companies that employ 80,000 people. Together, they consume about 30 percent of SABIC's annual output of 40.6 million metric tons per year(mt/y), including over 4 million mt/y of polymer output. Over the past decade, SABIC has provided Saudi Arabia's downstream plastics industry with $2 billion in raw materials.
Low domestic energy costs, a ready supply of raw materials, and a commitment to industrial diversification through foreign investment have facilitated the development of a plastics industry in Saudi Arabia. Fast-paced modernization and a lack of competitive alternatives have also contributed to an extraordinary demand for plastic products in the Kingdom. Since 1975, Saudi Arabia's per capita consumption of plastics has grown by 800 percent. Today, per capita consumption of plastics in the Kingdom has reached 40 kilograms, a rate higher than that of many Asian countries, and more than double the per capita consumption of the Middle East as a whole . The market is fueled by the packaging requirements of the food, beverage and consumer goods industries as well as the growing demand for construction materials, such as plastic packaging, corrugated boxes and double-lined bags. Because of Saudi Arabia's harsh natural environment, plastics are widely used as a substitute for traditional materials such as metal and wood. Saudi Arabia has also sought to capitalize on its location at the crossroads of global markets to export its plastics and plastics products to the Middle East, Asia , Europe, and North America.
Both SABIC and other private sector companies have undergone several waves of expansion and reorganization in order to increase capacity and meet the rising demand for plastics in the domestic market, and capitalize on the opportunities available in regional and international markets. In April 2002, SABIC agreed to
purchase the petrochemical subsidiary of DSM, a Dutch company, for $1.98 billion in cash. The move, which is SABIC's first entry into Europe. The acquisition pushed SABIC from its position as the 22nd largest global petrochemical producer to the 11th position. SABIC's purchase also propels the Middle East's largest non-oil industrial company further downstream by providing it with access to technology to produce the three main varieties of polyethylene as well as other industrial and fine chemicals. As a result, SABIC has become the third largest polyethylene producer and the fourth largest polypropylene producer in the world.
The acquisition of DSM also gives SABIC geographical diversification in manufacturing assets, bringing SABIC's production in closer proximity to the immediate demands of its customers.
The expansion of Saudi Arabia's plastics industry can also be attributed to government encouragement in the form of financial incentives and a supportive national policy. A rapidly increasing population, half of which is under the age of fifteen, has also been instrumental in this rapid market growth. Through a number of incentives, the Saudi Government encourages industrial joint ventures or licensing technology, and has helped the industry to move away from import substitution to actual growth in domestically manufactured plastic products. A testament to Saudi Arabia's commitment to developing its economy and providing a more favorable investment environment is the passage of a revised foreign investment law.
The new law allows foreign companies 100 percent ownership of their investment while enjoying the same incentives given to Saudi companies. In addition, the law significantly reduces corporate tax rates for foreign
companies. At the forefront of these reforms has been the Saudi Arabian General Investment Authority (SAGIA), which has issued inward investment licenses worth $13 billion since it was established in April 2000.

Home to more than a quarter of the world's proven oil reserves, Saudi Arabia also boasts over 230 trillion cubic feet (tcf) of gas reserves, 40 percent of which is non-associated - making the Kingdom's reserves the fourth largest in the world behind Russia, Iran and Qatar. By 2009, Saudi Arabia plans to expand its natural gas production to 14 billion cubic feet (bcf) from its current output of just below 6 bcf. The focus of this expansion hinges on
the development of non-associated gas, which will ensure a steady flow of energy and feed stock to its industrial base. Since more than 95 percent of Kingdom's basic petrochemicals are derived from methane and natural gas liquids (NGL), Saudi Arabia's commitment to expand its gas infrastructure will enhance the Kingdom's competitive advantage in world petrochemical and plastic markets.
As a result of its natural endowments, Saudi Arabia is a major producer of basic chemicals such as ethylene, propylene, ammonia, and methanol. With seven world class crackers and an annual production capacity of 5.8 million tons, Saudi Arabia is among the world's lowest-cost producers of ethylene, accounting for nearly half of all ethylene produced in the entire Middle East/Africa region. This versatile chemical has been instrumental to the development of the Kingdom's plastics industry. SABIC's whollyowned subsidiary
PETROKEMYA added 800,000 mt/y of ethylene capacity in 2001 with its Olefins III plant, raising its total ethylene production capacity to 2.6 million mt/y. The new flexible 800,000 mt/y ethylene cracker at affiliate YANPET also came online in 2001. Its flexible cracker uses propane, natural gas and ethane as feedstock.
Saudi Aramco has begun producing ethylene. In March 2002, Aramco announced that it was taking a 25 percent stake along with ExxonMobil and Fujian Petrochemical Company in a refining and petrochemical joint venture in the Fujian Province of China.
The construction of the 600,000 mt/y ethylene cracker marks Aramco's first foray into petrochemicals.
Saudi Arabia is also a major producer of aromatics such as styrene and benzene, which are used in the production of disposable transparent containers, packaging and thermal insulation. In April 2002,
Chevron Phillips Chemical Company LLC (CPChem) and the Saudi Industrial Investment Group (SIIG) annouced plans for a $1 billion expansion of their joint-venture aromatics complex in Jubail Industrial City. The new investment will result in the production of benzene, ethylbenzene, styrene and propylene. The joint venture, which is expected to be completed in 2006, is the largest private sector project now underway in the Kingdom. According to CPChem, a majority of the facility's styrene will be exported from the Arab Gulf region while other products and co-products will be marketed locally. Fluor Daniel was awarded the front-end engineering and program management for the entire project in addition to the detailed engineering, procurement, and construction management for the off-plot facilities. The existing Saudi Chevron Phillips facility, which started up in 2000, currently produces benzene (utilizing CPChem's proprietary Aromax® technology) cyclohexane and motor gasoline. CPChem and SIIG recently announced a 60,000 metric ton-per-year (200 million gallons per year) expansion of the cyclohexane unit.
SABIC and private producers in Saudi Arabia have made great strides downstream and have become global leaders in the production of chemical intermediates. Products from SABIC's Chemical Intermediates SBU include ethylene glycol (EG), ethylene dicholoride (EDC ), vinyl chloride monomer (VCM ), caustic soda produced by SABIC affiliate SADAF in Jubail, 2-ethyl hexanol (2-EH) and di-octyl phthalate (DOP) produced by SAMAD in Jubail. SABIC is actually the world's second largest producer of ethylene glycol. The company's 2001 output of 2.3 million mt/y of mono, di and tri-ethylene glycol accounts for 18 percent of the global supply. However, almost three quarters of EG production is dedicated to the Asian market, with the remainder going to Europe and the U.S.
Jubail United Petrochemical Company (UNITED) is the latest SABIC affiliate in the Kingdom and once completed, will be the second largest EG plant in the world. UNITED will have annual production capacities of 1 million tons of ethylene, 575,000 tons of ethylene glycol and 150,000 tons of linear alpha olefins. The company also has a 50 percent stake in an 800,000 mt/y polyethylene plant being built at the neighboring SABIC affiliate in Jubail, PETROKEMYA. In November 2001, Haliburton KBR, along with the Chiyoda and Mitsubishi Corporations were awarded the ethylene package. The UNITED plant will be the first grassroots cracker to use Halliburton KBR's SCORE. (Selective Cracking Optimum Recovery) technology, which is a combination of KBR and ExxonMobil ethylene technologies. SCORE. will provide UNITED with the highest selectivity to ethylene coupled to a low pressure recovery scheme which reduces the capital investment of the ethylene plant. Ticonex of the U.S. was also awarded the critical safety and turbomachinery package in February 2003.

With access to enormous hydrocarbon feedstocks, particularly ethylene, Saudi Arabia is one of the world's largest and lowest cost producers of polymers. In 2001, SAB IC's production of polymers increased 55 percent to 4.2 million tons, largely as a result of increased capacities and the debottlenecking of several plants. With the acquisition of DSM last year, SABIC's polymer production capacity is expected to increase by an estimated 2.6 million tons. Saudi companies are able to produce essential polymers such as linear low density polyethylene (LLDPE), high-density polyethylene (HDPE), lowdensity polyethylene (LDPE), polypropylene (PP), polyvinyle chloride (PVC), polystyrene (PS), polyethylene terephthalate (PET ), polyesters and melamine - a thermoset resin.
Saudi Arabia's increase in polymer production has made Saudi Arabia a primary player in the global polymer industry. The Kingdom exported 2.8 million tons ($1.65 billion) of plastic resins and goods in 2001, a 73 percent increase over the previous year. Greater polymer production has also focused the Saudi Government and SABIC's efforts towards developing a diversified downstream plastics industry. SABIC's business development team proactively markets new ideas from approximately 450 customers to produce finished products in the Kingdom, replacing imports and thereby maximizing usage of SABIC's polymers as a raw material in domestic markets. In 2001, Saudi downstream companies consumed 27 percent of SABIC's polymer output. Despite the focus on domestic development, the Kingdom still imports a large quantity of polymer products from abroad, especially polyethylene, polypropylene, polystyrene, PVC and petroleum resins. In fact, Saudi Arabia imported $590 million worth of plastic polymers and downstream products in 2000.
The Middle East, particularly Saudi Arabia, is quickly becoming the global center for polyethylene production. With
17 new ethylene crackers (including 7 in Saudi Arabia) being constructed throughout the Middle East, the region's annual polyethylene capacity will reach 28 billion pounds by 2007 - 9 billion pounds of which will be located in the Kingdom. SABIC will be the world's fourth largest polyethylene producer by 2007 , a remarkable accomplishment considering it was not even a top ten producer in 1997.
According to Plastic News,
feedstock advantage allows manufacturers to produce polyethylene at a cost of $300 per ton in the Middle East, as compared to $500 per ton in North America and the global average of $450 per ton.
SABIC continues its expansion with plans under way at
PETROKEMYA for an additional 800,000 mt/y from two new 400,000 mt/y lines of HDPE and LLDPE coming on stream in 2004. In cooperation with SABIC R&T, PETROKEMYA achieved a significant productivity increase of 10 percent at its polystyrene plant through the introduction of technical improvements to the production process from expandable polystyrene (EPS) and solid polystyrene (SPS). Polymers will increase by an additional 60,000 mt/y of PVC as a result of the de-bottlenecking of the National Plastic Company (IBN HAYYAN) affiliate and will further increase by an additional 250,000 tons of PET when the Arabian Industrial Fibers Company (IBN RUSHD) plant in Yanbu is completed. Meanwhile, Jubail Petrochemical Company (KEMYA) began to produce ethylene, propylene and py-gas as feedstock for its LLDPE/HDPE plants and new LDPE units. A major expansion program to build a new tubular high pressure LDPE plant with a capacity of 218,000 mt/y and an olefins cracker to produce ethylene was also completed.
The expansion made the affiliate a fully integrated company. In the private sector, Gulf Petroproduct Company, a joint venture between Saudi Offset Limited Partnership and India's Tamilnadi Petroproducts is planning to build a $300 million normal paraffin and linear alkyl benzene project in Yanbu. In addition, a $533 million polypropylene plant will also be built in Jubail. The projected plant, which will produce 450,000 mt/y of polypropylene, will be constructed and managed under a new $160 million joint venture company to be named
Saudi Polyolefins Company. Bassel Holding Middle East will hold a 25% stake in the project, and the other 75% will be held by National Petrochemical Industrialisation Co.

With increased investment and technological know-how, the plastics industry in the Kingdom has undergone a major diversification from basic to more sophisticated products. Because of a lack of tradition al materials such as metal and wood, products using more complex plastic composites are being integrated into the Kingdom's packaging and construction sectors. Laminated film, barrels, storage tanks, and multipurpose sacks are used for packaging, while water and waste pipes, electrical switches, windows, artificial marble, plastic sanitary ware, and insulating products are used in the Kingdom's construction industry. Saudi consumers are increasingly requiring more sophisticated plastic products such as disposables, furniture, pipes, water dispensers, thermal insulation materials, ceiling tiles, kitchenware, and a number of other plastic products with agricultural and construction applications. Not only is there a great demand for importing these finished products from abroad, but there is a growing market in the Kingdom for the sophisticated machinery, equipment, spare parts and technical services that can be used to manufacture them domestically.
Until recently, SABIC limited its involvement in the plastics sector to being a domestic supplier of thermoplastic resins. In 1996 SABIC's affiliate IBN HAYYAN joined the downstream plastics producers by taking a 57 percent stake in the national joint venture,
Tayf (the Ibn Hayyan Plastic Products Company). Other partners in TAYF were the Saudi Industrial and Commercial Agencies Company with 31 percent, the Saudi Industries Development Company (Tatweer) with 10 percent, and the Saudi Ceramic Company with 2 percent. The total project investment for TAYF was around $93 million. TAYF, which went on stream in December 1999, is strategically located in Jubail to receive its raw materials from SABIC's other affiliates. IBN HAYYAN and another SABIC affiliate, SAMAD, are responsible for supplying TAYF with PVC resins and dioctylphtalate. TAYF's initial product mix includes seven PVC-based products, namely, synthetic leather, wall covering, floor covering, artificial wood, book-binding material, calendered rigid film, and calendered soft film. A part from synthetic leather, all of TAYF's products are being manufactured for the first time in the Kingdom. SABIC has secured technology contracts with leading manufacturers of plastics products including Pickhardt and Siebert GmbH, and Konrad Homschuch AG, of Germany.

The low cost of plastics raw materials, a dramatically rising demand, and a liberal investment regime have contributed to a flourishing partnership between Saudi Arabian and American, European, and Asian plastics companies. Joint ventures have been set up in both upstream and downstream plastics industries. Saudi Arabia's plastics industry has attracted a number of the world's leading companies, including ExxonMobil of the U.S., and Mitsubishi of Japan. Through a number of incentives, the Saudi Government encourages industrial joint ventures or licensing technology, and has helped the industry to move away from import substitution to actual growth in domestically manufactured plastic products. Because of their role in the Kingdom's diversification program, plastics projects benefit from significant government incentives. Incentives include a 10-year tax holiday, access to low-cost feedstock from Saudi Aramco and SABIC, and loans on favorable terms commonly covering 50 percent of the total capital cost from the Saudi Industrial Development Fund (SIDF).
One of the most recent ventures established involves a 45,000 square meter plastics and packaging plant in Jeddah, which was established in conjunction with Yousef Algosaibi Processing & Packaging Limited, Bajrai International Group, and Omar Qandeel Establishment. The factory uses manufacturing and converting technology that incorporates print media production, high-speed fiber printing, lamination, a quality assurance laboratory and raw material and finished goods storage. According to Gulf Industry, this is the first
Tetra Pak 'green field' factory in the world to incorporate both leading-edge fiber and plastic packaging technologies located on one site. Having invested $65 million in the development, the company now processes virtually all of the Middle East's Tetra Pak material packaging orders in Jeddah, with the factory able to produce up to 15 million packs a day, or about four billion a year. Saudi staff now operate the world's fastest printers - capable of printing one million packages per hour - modern high-speed extrusion laminators, and fully automated shrink-wrapping and palletizing machines.
There are excellent opportunities evolving from new joint venture projects undertaken by SABIC and the private sector for U.S. manufacturers and suppliers of industrial equipment to the petrochemical and plastics industry. American design and engineering companies/licensors have good opportunities to license their processes or provide technical know-how through licensing agreements. American technology and production processes maintain a reputation for being technically advanced, of high quality and durability. Arrangements already exist with a number of U.S. and third-country companies, including UOP, Great Lakes Chemical Corp., Union Carbide, Halliburton Kellogg Brown & Root, Dow Chemical, and Bishop Technology Co.

SABIC Manufacturing Companies

Company Location Partnership Feedstocks Products
Aluminum Bahrain
Bahrain Bahrain (74.9%), Brenton Investments, Germany (5.1%), the Saudi Public Investment Fund, represented by SABIC (20%) Alumina Aluminum (liquid metal, ingots, rolling slabs, billet)
Saudi Methanol Company
Jubail A 50/50 SABIC joint venture formed in 1971 with a consortium of Japanese companies led by Mitsubishi Gas Chemical Company Methane Chemical Grade Methanol
Gulf Aluminum Rolling Mill Company
Bahrain Kuwait (16.97%), Bahrain (38.36%), Iraq (4.12%), Oman (2.06%), Qatar (2.06%), Gulf Investment Corp. (5.15%) and Saudi Arabia represented by SABIC (31.28%) Aluminum Aluminum Sheets and Can Stocks
National Industrial
Gases Company
Jubail SABIC (70%) and a group of Saudi Arabian producers of industrial gases (30%) Air Oxygen, Nitrogen, Argon, Krypton-Xenon
Gulf Petrochemical Industries Company
Bahrain Joint venture with equal partnership for the Petrochemical Industries Company of Kuwait, the State of Bahrain and SABIC Methane Ammonia, Methanol, Urea
Saudi Iron and Steel Company
Jubail A wholly-owned affiliate of SABIC Limestone, Iron Ore, Scrap Iron & Steel, Natural Gas Steel Rebar, Wire Coil, Steel Sections, Flat Steel Products
National Chemical
Fertilizer Company
Jubail A 50/50 SABIC joint venture with SAFCO Methane, Ammonia, Phosphate Rock, Sulphuric Acid, and Potash Ammonia, Granular Urea, Compound and Phosphate Fertilizers
National Plastic Company
Jubail SABIC (86.5%), NIC, Saudi Arabia (10%), Saudi Plastic Product Company, Arabian Plastic Manufacturing Co., Ltd. (3.5%) Ethylene (Supplied by PETROKEMYA), Ethylene Dichloride (supplied by SADAF) Vinyl Chloride Monomer, Polyvinyl Chloride, PVC Paste
Arabian Industrial Fibers Company
Yanbu SABIC (70%) and 15 Saudi Arabian and regional private sector partners Ethylene Glycol (supplied by YANPET) Aromatics (Xylenes and Benzene), Purified Terephthalic Acid (PTA), Polyester Textile Chips, Textile Staple, Bottle Grade Chips, Carpet Staple
National Methanol Company
Jubail SABIC (50%),
Hoechst-Celanese - USA (25%),
Pan Energy - USA (25%)
Methane, Butane Chemical Grade Methanol, MTBE
Saudi European Petrochemical Company
Jubail SABIC (70%), Neste Oy-Finland (10%), Ecofuel-Italy (10%), Arab Petroleum Investment Corporation(APICORP) (10%) Chemical Grade Methanol (supplied by IBN SINA and ARRAZI), Butane MTBE, Polypropylene
Jubail Petrochemical Co.
Jubail A 50/50 SABIC joint venture with ExxonMobil (USA) Ethylene (supplied by Sadaf) Polyethylenes
Arabian Petrochemical Co.
Jubail A wholly-owned affiliate of SABIC Ethane, Styrene, Propane,Butane, Natural Gas Ethylene, Polystyrene, Butene-1, Propylene, Butadiene, Benzene
Saudi Petrochemical Co.
Jubail A 50/50 SABIC joint venture with Pecten Arabian Company, a subsidiary of Shell Oil Co. (USA) Ethane, Salt, Benzene,
Methanol, Butane
Ethylene, Crude Industrial Ethanol,
Styrene, Caustic Soda, Ethylene
Dichloride, MTBE
Saudi Arabian Fertilizer Co.
Dammam & Jubail SABIC (41%), SAFCO Employees (10%), Private Saudi Arabian shareholders (49%) Methane Ammonia, Urea, Sulphuric Acid, Melamine
Jubail Chemical Fertilizer Company
Jubail A 50/50 SABIC joint venture formed in 1971 with Taiwan Fertilizer Company Methane, Propylene (supplied by PETROKEMYA) Ammonia, Urea, 2-Ethyl Hexanol, DOP
Eastern Petrochemical Co.
Jubail A 50/50 SABIC joint venture with a consortium of Japanese companies led by Mitsubishi Corporation Ethylene (supplied by PETROKEMYA) Linear Low Density Polyethylene (LLDPE), Ethylene Glycol
Ibn Hayyan Plastic Products Company
Jubail SABIC affiliate IBN HAYYAN (57.17%), Saudi Industrial & Commerical Agencies Company (30.83%), Saudi Industrial Development Company (TATWEER 10%), Saudi Ceramic Company (2%) Polyvinyl Chloride (supplied by IBN HAYYAN), Di-Octyle Phthalate (sourced from SAMAD) Plastic Boards, Wall Covering, Artificial Leather, Book Binding Products
Saudi-Yanbu Petrochemical Company
Yanbu A 50/50 SABIC joint venture with ExxonMobil (USA) Ethane Ethylene, Polyethylene, Ethylene Glycol


Platts 2004/2/11

Saudi Sabic to launch 800 kt/yr PE complex in Al-Jubail in March

Saudi Arabia's Sabic plans to start up its two new 400,000 mt/yr polyethylene plants in Al-Jubail next month, a source close to the firm said Wednesday. The plant's start-up had been delayed since December last year due to various mechanical snags and a serious shortage of butane feedstock.

The shortage has hindered Sabic's petrochemical production in Al-Jubail and Yanbu by 20-30%, since Q4 2003. The butane shortage has stabilized, the source added, even though supply would remain tight through March when it fulfills its pending backlog orders. The new PE plants were expected to reach maximum output rates in the second half of the year, the source added. The plants would be able to produce
linear low density polyethylene and high density polyethylene.

Chemical Week Mar 31, 2004

Sabic Eyes Mexico Project

Sabic is exploring the possibility of setting up a petrochemical production base in Mexico to serve the North American market, says Sabic CEO Mohamed Al-Mady. The company is in discussions with Petroleos Mexicanos (Pemex; Mexico City) as a potential joint venture partner in the Phoenix project, Al-Mady says. North America is a strategic and important market for us,he says. Talks are in early stages, however, he says. The proposed Phoenix project in Mexico would include a cracker to produce 1 million m.t./year of ethylene, and several derivatives units. Sabics growth in North America is more likely via the establishment of a production base in the region than through the acquisition route, which the company has been pursuing in the past, Al-Mady says. Natural gas prices in the U.S. are unbearable for any producer,he says. We are not looking at investments in the U.S. but are open to acquisition opportunities,he adds. The company has not identified any attractive assets, however. Sabic currently supplies North America with ethylene glycol, fertilizers, methanol and methyl tert-butyl ether from its plants in Saudi Arabia and Europe.

Chemical Week, June 4, 2003

Pemex launches road show for $2.6-billion project. (New Construction Projects).

Pemex Petroquimica (Mexico City) has begun a road show to attract potential investors in the company's $2.6-billion Phoenix Project, which consists of complexes producing olefins and derivatives, and aromatics in Mexico. "We are planning to build the complexes in association with national and international industry leaders," Pemex president Rafael Beverido Lomelin said at the recent Achema chemical engineering exhibition at Frankfurt. Pemex plans to hold a 25%-30% share, Beverido says. It intends to discuss the project with 16 potential partners including Atofina, BASF, Chevron Phillips Chemical, ExxonMobil Chemical, Repsol YPF, and Sabic, sources say.

The olefins complex will cost about $1.8 billion. It will have annual capacities for
1 million m.t. of ethylene; 125,000 m.t. of butadiene; 450,000 m.t. each of high-/linear low-density polyethylene (HDPE/LLDPE) and low-density PE (LDPE); 400,000 m.t. of polypropylene; and 500,000 m.t. of styrene. The location will depend on feedstock, Beverido says. It could be built at Coatzacoalcos or Altamira if it is based on naphtha, but it will definitely be built at Coatzacoalcos if it is based on ethane, he says. The aromatics complex will cost about $800 million, and its capacities will include 600,000 m.t.-700,000 m.t./year of para-xylene and 200,000 m.t./year of benzene.

"We are expecting to finish planning this year and to have an agreement with joint venture partners in the first half of next year," Beverido says. Basic engineering would begin in the second half of 2004, and the complexes would come onstream in 2008, Beverido says. Pemex has not decided whether the two complexes will be built at the same location. "This will depend on our partners," Beverido says.

Pemex is also spending about $1 billion to improve its existing plants in Mexico, Beverido says. The company is doubling vinyl chloride monomer capacity at Pajaritos to 405,000 m.t./year by December. It is adding 250,000 m.t./year of ethylene capacity to its 600,000-m.t./year cracker, and building a 300,000-m.t./year HDPE unit there, by end-2005. Pemex also plans to expand ethylene capacity at Cangrejera by 250,000. m.t./year, to 850,000 m.t./year; styrene capacity by 100,000 m.t./year, to 250,000 m.t./year; and LDPE capacity from 240,000 m.t./year, to 315,000, by first quarter 2004.

May 13, 2004 Dow Jones

Germany's Linde Gets Petrochem Plant Deal In Saudi Arabia

Saudi petrochemical giant, Saudi Basic Industries Corp., or Sabic, (SBI.SA) said Wednesday that it has awarded a lump sum turnkey contract to Linde AG (LIN.XE) of Germany for the engineering, procurement and construction of a new linear alpha olefins plant.

Sabic didn't disclose the value of the deal.

The plant will be built in Jubail, an industrial city in the eastern province of Saudi Arabia near the Persian Gulf.

The facility will be the first of its kind, utilizing a technology jointly developed by Sabic and Linde, the Saudi company said in a statement.

The facility is expected to be completed by the third quarter of 2006. The plant capacity will be
150,000 metric tons of linear alpha olefins per year, it said.

Platts 2004/7/1

Jubail United MEG plant to start commercial sales in November

Jubail United of Saudi Arabia, a 100% subsidiary of SABIC, has scheduled to start commercial operations at its first monoethylene glycol plant in Al-Jubail by November, a source close to the company said Thursday.

Over the next five years, SABIC will be starting up four new MEG plants of 600,000 mt/yr capacity each. Three of the units will be under its 100%-owned subsidiaries, Jubail United Petrochemical Co and Yanbu United Petrochemical Co, although at different sites. Two of the units will be in Al-Jubail while the third one will be in Yanbu. The fourth MEG plant, however, will be under its 50:50 joint-venture with a Japanese consortium called Saudi Petrochemical Development Corp.

2004/9/3 Platts

SABIC to commission 600 kt/yr new MEG plant in Al-Jubail in Oct

Saudi Arabia's SABIC plans to commission its 600,000 mt/yr new monoethylene glycol plant in Al-Jubail in October 2004, a company source said Friday.Commercial operations were expected to start by November, the source added.

The company had plans to bring on-stream four MEG plants, with total capacity of 2.4 mil mt/yr, between 2004 and the first quarter of 2008. Three of the units will be under its 100% subsidiaries Jubail United and Yanbu United Petrochemical Co, while the fourth one will be under its 50:50 joint-venture with a Japanese consortium called Saudi Petrochemical Development Corp. The second plant, JUPIC 2, is been slated to start operations in Q3 2005, the third plant will be built in Yanbu by Q1 2007, while the fourth plant will start by the first quarter of 2008. Meanwhile, MEG spot prices were discussed $10/mt higher as of Friday afternoon, compared to $1,210-1,220/mt CFR China last week, on speculative demand and tight supply.

Platts 2004/10/21

SABIC denies take over of Nova; Mexican plans close to fruition

SABIC's CEO Mohamed Al Mady, Wednesday,
denied market rumors that the company was seeking to buy US-based styrenics producer Nova Chemicals, as a platform to operate a petrochemical complex focussed on the North American markets. "We have not had any discussion with Nova," Al Mady said, addressing reporters at the K 2004 plastics and rubber show in Dusseldorf, Germany.

In related developments, Al Mady said that SABIC was close to reaching an agreement
with a Mexican company to build or operate a naphtha-based cracker in Mexico. If this joint venture comes to fruition, it will be SABIC's first successful foray in Mexico. The products coming out of this cracker will mostly be to satisfy the local market demand, he said, adding that if there will be any balance, these products would then be exported. "We will make a decision soon," he said. Al Mady said that SABIC is in contact with Pemex Petroquimica, but declined to reveal further details.

ameinfo 2005/5/12

SABIC awards contract to Technip for Yansab ethylene and propylene plant

Saudi Basic Industries Corporation (SABIC) signed a Letter of Intent (LOI) with the Italian company Technip for the engineering, procurement and construction of an ethylene and propylene plant at the YANSAB Complex in Yanbu Industrial City, on the Red Sea coast of

The plant will have a nameplate
ethylene production capacity of 1.3 million metric tons per year (mt/y) and 400 thousand mt/y of propylene. The new large-scale plant will form the core of future manufacturing units within the YANSAB project.

The LOI was signed by Eng. Abdulrahman Saleh Al-Fageeh, President YANSAB on behalf of SABIC, and Mr. Riccardo Moizo, Vice CEO, Middle East and South East Asia, on behalf of Technip Co.

Mohammed Al-Mady, SABIC's Vice Chairman and CEO, attended the signing ceremony and said: 'This mega-project was undertaken by SABIC at Yanbu Industrial City as an extension of SABIC's ambitious plan to significantly increase production of basic petrochemicals, intermediates and polymers by 2008. YANSAB projects alone will add nearly 4 million mt/y of production from Yanbu Industrial City to meet the growing global demand for petrochemical products.

'The YANSAB project's major objective is to provide high-quality and value-added products to boost the nation's domestic industrial production, as well as strengthen the company's competitive capabilities in global markets'.

2005/5/30 ameinfo

SABIC signs Letter of Intent (LOI) with the US Flour Company

Saudi Basic Industries Corporation (SABIC) today signed a Letter of Intent with the US Flour Company to construct utilities and site facilities at the SABIC affiliate, Yanbu National Petrochemicals Company (YANSAB) in Yanbu.

The LOI was signed in the presence of Mohamed Al-Mady, SABIC Vice Chairman & CEO, by Abdulrahman Al-Fageeh, President YANSAB, for SABIC, and Mr. David Seaton, Flour Sr. Vice President, Chemical Products Business Line, Energy and Chemicals Group, for the Flour Company.

Mohamed Al-Mady said, 'The utilities and site facilities are the largest units of the YANSAB complex and are vital for feeding the various complex plants with water, power supplies, steam and chilled water.

'I expect that these works will be completed within 34 months. Completion of the complex mechanical works is expected during 1Q2008. Initial annual production capacity will go beyond 4 million MTY of petrochemical products which will strengthen SABIC's contribution to national development plans and boost its competitive capabilities in the global markets.

'YANSAB will apply the latest state-of-the-art and cutting-edge technologies in its production operations including
Scientific Design Ethylene Glycol technology, 50% owned by SABIC and 50% by German Sud Chemi. It will also use Butene-1 technology developed by SABIC in cooperation with the French Petrol Institute. In addition, the complex will apply for first time a new technology for the manufacture of HDPE and other technologies for conversion of pure aromatic compounds into Benzene.

'Once operational, this mega project will employ 1,500 employees, benefiting Saudi citizens.'

YANSAB will be one of the world's largest plants. It will produce
1.3 million MTY of Ethylene; 400,000 MTY of Propylene; 900,000 MTY of High Density Polyethylene (HDPE) and Low Density Polyethylene (LLDPE); 400,000 MTY of Polypropylene (PP); 700,000 MTY of Mono Ethylene Glycol (MEG); 250,000 MTY of Benzene, xylene and toluene compound. The complex will manufacture a wide range of basic chemical, intermediate and polymer products.

SABIC has recently selected the ABN AMRO Group with Saudi Hollandi Bank as the financial advisor for the YANSAB loan.

日本経済新聞 2005/7/19

サウジの石化プラント 東洋エンジが受注 450億円


2005 年12 月9 日 SABIC


 サウジ基礎産業公社(SABIC: Saudi Basic Industries Corporation)は12 月6 日、テクニップ・イタリア社との間で、サウジアラビアの紅海沿岸にあるヤンブー工業都市のヤンサブ石油化学センターにエチレンとプロピレンの製造工場の建設を委託する契約を締結しました。さらに、その前日の12 月5 日には、東洋エンジニアリング(TEC)との間で、同じくヤンサブにエチレン・グリコール工場の建設を委託する契約を締結いたしました。
 SABIC のモハマド・アルマディ副会長兼CEO、東洋エンジニアリングの山田豊社長兼CEO が見守る中、契約書には、SABIC を代表してユーセフ・アルザメル基礎化学品副社長兼ヤンサブ会長、テクニック・イタリア社を代表してネロ・ウッセラッティ中東・東南アジアCEO、東洋エンジニアリングを代表して副島憲二常務が調印しました。
 SABIC のアルマディ会長は「この2 つの契約の調印は、当社の子会社ヤンサブを世界最大級の石油化学センターとするための重要なステップであり、2008 年に生産が開始されますと、SABIC の競争力が増強されます」と語りました。
「ヤンサブはサウジアラビア国内のSABIC の子会社としては一番新しく、各種の石油化学製品を年間400 万トン以上製造する能力を備えることになり、SABIC で最大の石油化学工場となります。内訳はエチレン130 万トン、プロピレン40 万トン、ポリエチレン90 万トン、ポリプロピレン40 万トン、エチレン・グリコール70 万トン、ベンゼン・キシレン・トルエン25 万トン、ブテン-1およびブテン-2 が10 万トンとなります」
 「フェーズ1 とフェーズ2 におけるヤンサブの従業員数は1,500 人の予定で、サウジにとって有望な雇用機会の創出となります。ヤンサブでは、芳香族蒸留分からベンゼンを生産し、また、ポリエチレンを生産する新規プロセスなど、SABIC が特許を保有する技術も含め、最新の技術を工場に投入いたします」。ヤンサブの資本金の55%をSABIC が、また、SABIC の子会社のIBN RUSH とTAYF が計10%を、残りの35%は公募する予定です。
x x x x

 サウジ基礎産業公社 (SABIC)は時価総額が中東で最大の企業であり(1,500 億米ドル以上)、世界の10大石油化学製品メーカーの1社です。ポリエチレン、ポリプロピレン、グリコール、メタノール、MTBE、肥料のマーケット・リーダーであり、世界第4 位のポリマー・メーカーです。
 SABIC の利益は2004 年、前年比112%増となる38 億米ドルと創業以来の新記録に達しました。2004年の売上高は前年比47%増の183 億米ドルで、中東の上場会社の中で売上げ、利益とも最大を記録しました。
 SABIC は相互に関連する6 つの戦略的事業単位(基礎化学品、インターミディエート、ポリオレフィン、塩化ポリビニール及びポリエステル、化学肥料、金属)で構成されています。研究開発資源も充実しており、リヤド、オランダのヘレーン、米国のヒューストン、インドのワドダラに研究開発センターを展開しています。SABIC は世界で1 万6,000 名余りを雇用しています。
 SABIC の総生産能力は2001 年の3,540 万トンから2004 年には4,290 万トンに増強されました。
 SABIC は、サウジアラビアのリヤドに本社があり、原油採掘の副産物として産出する炭化水素ガスを原料として化学製品、ポリマー、化学肥料等を生産するため、サウジアラビア政府が1976 年に設立しました。現在、SABICの株式の70%をサウジアラビア政府が、残りの30%はサウジアラビア国内および湾岸協力会議(GCC)加盟国の民間投資家が保有しています。
 SABIC Europe はオランダのシタルトに本社を置き、2,300 名を雇用し、オランダのヘレーンとドイツのゲルゼンキルヘンにある石油化学工場で、ポリプロピレン、ポリエチレン、ハイドロカーボンを製造し、ヨーロッパのセールスオフィスとロジスティックス拠点のネットワークを通じて販売しています。SABIC Europeは2004年には、ポリマー、基礎化学製品、インターミディエート合計600 万トンを主として欧州市場に販売しました。

2005/7/27 SABIC

SHARQ signs Letter of Intent to construct olefins, ethylene glycol and polyethylene plants

SABIC affiliate, Eastern Petrochemical Company (SHARQ), has signed letters of intent to award contracts to:

1. Stone & Webster Ltd., UK, to construct an Olefins Plant with a production capacity of 1,300,000 MT per annum of Ethylene;
2. Samsung Engineering Company Ltd., South Korea, to construct its Ethylene Glycol Plant with a production capacity of 700,000 MT per annum (increasing overall Ethylene Glycol production capacity to more than 2,000,000 MT per annum).
3. Linde, Germany, to construct its Linear Low and High Density Polyethylene plants with a production capacity of 800,000 MT per annum, which will increase polyolefins production at SHARQ to reach more than 1,600,000 MT per annum.

Mohamed Al-Mady, SABIC Vice Chairman and CEO said, SHARQs expansion project will add 2.8m MT annually to SABICs production and will further enhance SHARQs position as the worlds largest single producer of Ethylene Glycol. This will also enhance SABICs global ranking alongside the other global petrochemicals companies who produce this product. SABIC is currently ranked 2nd and is expected to become number one once this project comes on stream. SABIC is the worlds 3rd largest producer of polyethylene and number four for polyolefins.

The agreements will cover engineering, procurement and construction of the plants at the SHARQ affiliate in Al-Jubail, Saudi Arabia. These will be complete by the first quarter of 2008.

The letters of intent were signed by Mr. Mohammad Al-Jabri, SHARQ President, with executive representatives from Stone Webster Ltd., Samsung Engineering Company and Linde.

SHARQ is a joint venture equally owned by Saudi Basic Industries Corporation (SABIC) and SPDC Ltd, a Japanese consortium led by the government of Japan and the Mitsubishi group of companies.

2005/7/25 Aker Kvaerner ASA (アーカー・クバナー社:本社ノルウェー)

Joint success as Aker Kvaerner teams with SINOPEC for world scale project

As announced previously today, Aker Kvaerner has agreed a strategic joint venture with China Petrochemical Corporation (SINOPEC Group) to execute a world scale polyolefins project for Saudi Basic Industries Corporation (SABIC). In Yanbu, Saudi Arabia, the joint venture has been awarded a letter of intent by YANBU National Petrochemical Company (YANSAB) - an affiliate of SABIC - for the engineering, procurement and construction of its world-scale polyolefins complex.

"We are delighted with this joint achievement. Our successful cooperation, hard work and mutual understanding has demonstrated our combined strength in this highly competitive international environment. This is the first opportunity to unite our strength, creativity and resource in international bidding. It establishes a sound basis for us to work together in the future on a wide variety of business prospects," said Wim van der Zande, President of AK Process, Aker Kvaerner's European Process business.

He continued: "Our organisations are extremely focussed on the successful delivery of this project and our integrated team is already making preparations to ensure we get underway quickly."

Aker Kvaerner will be the joint venture leader on this project for YANSAB, and expects its involvement to be in the region of USD400 million. The total contract value to the joint venture is not disclosed. The joint venture will provide the engineering, procurement and construction for a
Linear Low Density Polyethylene (LLDPE) plant and a Polypropylene (PP) plant, together with the associated product handling facilities. The new plants, part of a major new ethylene complex, will each have a nameplate capacity of 400,000 tonnes per annum. The PP plant will use Dow's UNIPOL(TM) polypropylene technology, whilst the polyethylene plant will utilise SABIC's LLDPE technology.

There will be an integrated management team, whereby Aker Kvaerner's scope will include the overall project management services, the extended basic engineering and procurement of the critical equipment. SINOPEC will provide the detailed engineering and a significant proportion of the skilled labour required for the construction activities.

The project is scheduled to commence at the end of this month, and the complex is expected to come on stream in April 2008.

1. AKER KV?RNER ASA, through its subsidiaries and affiliates ("Aker Kvaerner"), is a leading global provider of engineering and construction services, technology products and integrated solutions. The business within Aker Kvaerner comprises several industries, including Oil & Gas, Refining & Chemicals, Mining & Metals, Pharmaceuticals & Biotechnology, Power Generation and Pulp & Paper. The Aker Kvaerner group is organised into two principal business streams, namely Oil & Gas and E&C, each consisting of a number of separate legal entities. Aker Kvaerner is used as the common brand/trademark for most of these entities. The parent company in the group is Aker Kv?rner ASA. Aker Kvaerner has aggregated annual revenues of approximately NOK 35.6 billion and employs approximately 22,000 people in more than 30 countries.

2. AK Process is a trading name of Aker Kvaerner Netherlands B.V., a wholly owned subsidiary of AKER KVAERNER ASA and the legal entity responsible for the execution of the work. AK Process serves the chemicals and polymers, refining and onshore oil & gas industries. It provides the full life cycle of a project from concept studies, through to design, engineering, project management, delivery of process technologies, procurement, construction and maintenance services. As a pure project execution/EPC specialist, AK Process can provide customers with strategic 'one-off' services or full turnkey solutions under a single project management control. It works with its customers in the development of major technological innovations, having participated in the conceptualisation and implementation of ideas, which are the foundation for world-class production facilities.

3. SABIC is the largest petrochemical producer in the Middle East and now the 6th largest manufacturer in polypropylene and 4th in overall polyolefins production. The group produces almost 5 million tons of polyethylene and polypropylene per year. SABIC is owned by the Saudi Government (70%) and the private sector (30%). Private sector shareholders are from Saudi Arabia and other countries of the six-nation Gulf Cooperation Council (GCC).

YANSAB is the newest SABIC affiliate. In addition to the PP and LLDPE production capacity, YANSAB is planned to produce 1.3 million tpa of Ethylene; 400,000 tpa of Propylene; 500,000 tpa of High Density Polyethylene (HDPE); 700,000 tpa of Mono Ethylene Glycol (MEG); and 250,000 tpa of Benzene, xylene and toluene compound. The complex will manufacture a wide range of basic chemical, intermediate and polymer products.

4. Sinopec Corp. is one of the largest integrated energy and chemical companies in China. It is China's largest producer and distributor of oil products (both wholesale and retail of gasoline, diesel, jet fuel) and No.1 producer and supplier of major petrochemical products (including petrochemical intermediates, synthetic resin, synthetic fibre monomers and polymers, synthetic fibre and chemical fertilizer), as well as the 2nd largest crude oil producer.

5. *Polyolefins are a family of polymers derived from propylene and ethylene. As polymers, they form tough, flexible plastics with a large variety of uses. Applications range from rigid materials for refrigerators, computers and car parts, to soft, flexible fibres. Some have high heat-resistance for microwave food containers, while others melt easily and can be used for heat-sealable food packaging. Generally easy to recycle, polyolefins are steadily replacing traditional materials in many applications.

2005/10/3 AME Info

SABIC affiliate SHARQ signs three contracts for the implementation of mega expansion project at its complex in Jubail Industrial City

SABIC's affiliate, Eastern Petrochemical Company (SHARQ), has recently entered into three contracts with Stone & Webster Limited, Foster Wheeler Energy Limited - United Kingdom and LINDE-KCA-Dresden GMBH - Germany, for the implementation of a mega expansion project at its complex in the Jubail Industrial city.

The new project's full capacity is expected to go on-stream by 2008.

The three contracts were signed by Dr. Abdulazzez Al-Jarbu , Chairman, SHARQ's Board of Directors, Mr. Tim Barfield Chief Executive Operations, Stone & Webster Limited, Mr. S.J. Davies Chairman & Chief Executive of Foster Wheeler Energy Limited, and Dr. Helmut Honnicke of LINDE-KCA-DRESDEN GMBH.

Stone & Webster Limited will carry out the engineering, supply and construction of
Ethylene Plant with a designed annual capacity of 1.3 million MT. The project completion date is scheduled for 2Q2008. Foster Wheeler Energy Limited will construct the utilities & offsite (U&O) facilities for SHARQ 3rd Expansion Project, while LINDE-KCA-DRESDEN GMBH will engineer, supply and construct the Linear Low Density (LLDPE) and high density (HDPE) polyethylene plants, with total annual capacity of 800,000 MT which is expected to go on-stream by Q2 2008.

2006/12/18 Gulf Daily News

Sabic expansion scheme covers India and China

Sabic is in talks to build a chemical plant in India as part of plans to boost capacity by almost 50 per cent between 2009 and 2015, the company's CEO said yesterday. The state-controlled firm, the world's largest chemical company by market value, expects to reach agreement with a partner to build the ethylene and other chemicals-products plant by the end of next year, Mohammed Al Mady said in an interview in Dubai.

He declined to give further details.

Sabic, which expects to produce about 51 million tonnes of chemicals and steel this year, plans to boost total capacity to 100m tonnes by 2015, building plants in China, India and Saudi Arabia, and acquiring companies in Europe and the US, Mady said.

It has already committed to development plans worth at least $25 billion to boost capacity by a third to 68m tonnes in 2009, Mady said.

In September, it agreed to buy the European operations of US chemical maker Huntsman Corp for $700m.

"It is a huge market," Mady said of India, the world's second-most populous country. The planned plant would supply the local market where a surging economy is spurring demand, he said.

Sabic is also in talks with China's Dalian Shide and China Petroleum and Petrochemical Corp (Sinopec) about building a plant in China. The discussions started three years ago, he said.

"Doing business in China takes patience," Mady said, declining to predict when he might reach agreement on a China plant.

Sabic, set up in 1976 to help diversify the Saudi economy away from crude oil, plans to acquire companies that make "speciality" chemicals such as rubber and plastics for vehicles, so that they account for 25 per cent of revenue within 15 years, compared with "very little" now, Mady said.

Last month, it agreed with ExxonMobil to study setting up a rubber plant in Saudi.

"Sabic is looking to diversify its portfolio into specialities," Mady said. "We want to build this portfolio for cyclicality. Also, it will give us a step up in our technological knowhow," he said.

Oct. 22, 2007 Uhde

New contract for mega size ammonia plant in Saudi Arabia

Samsung Engineering Co., Ltd. of Seoul has commissioned Uhde to provide the licence and comprehensive engineering and supply services as part of a major plant contract for the engineering and construction of a turnkey ammonia plant. The contract, worth the equivalent of some US$950 million, was awarded to Samsung Engineering Co., Ltd. in South Korea by Ma'aden, the Saudi Arabian Mining Company.

The ammonia plant will form part of one of the world's largest fully integrated fertiliser production operations - a joint venture project between Ma'aden and Saudi Arabian Basic Industries Corp. (SABIC) to mine world-scale phosphate reserves in the north of the country to produce fertilisers at the new purpose-built processing facility in Ras Az Zawr, some 400km north-east of the Saudi Arabian capital Riyadh. The facility will also comprise a sulphuric acid plant, a phosphoric acid plant and two diammonium phosphate plants. The project, including the ammonia plant, is due for completion in late 2010.

Uhde's scope of services includes the process licence and basic engineering as well as the supply of special equipment for a single-train ammonia plant, which, with a production capacity of 3,300 tonnes per day, will be one of the world's biggest. For Uhde, the contract is worth a sum in the three-figure millions of euros.

Ma'aden has decided in favour of the Uhde Dual-Pressure Process as the technology to be used in the ammonia plant. It is a particularly reliable and environment-friendly plant concept which enables single-train ammonia plants with capacities of 3,000 to 4,000 tonnes per day to be built. In late 2006 Uhde successfully commissioned an almost identical ammonia plant in Saudi Arabia for Saudi Arabian Fertilizer Co. (SAFCO), an affiliate of SABIC.

"This new contract is the logical continuation of our technological leadership in the field of mega size ammonia plants and an indication of the excellent reputation enjoyed by Uhde in the Saudi Arabian industrial sector," said Klaus Schneiders, Chairman of Uhde's Executive Board.

Uhde is a company in the Technologies segment of the ThyssenKrupp Group and has a workforce of more than 4,100 employees worldwide. The company's activities focus on the engineering and construction of chemical and other industrial plants in the following fields: fertilisers; electrolysis; gas technologies; oil, coal and residue gasification; refining technologies; organic intermediates, polymers and synthetic fibres; and also coke plant and high-pressure technologies. We also provide our customers with professional services and comprehensive solutions in all areas of industrial plant operation.

Platts 2007/10/25

Saudi Arabia's SABIC mulls benzene plant build

Saudi Arabian producer SABIC is considering building a benzene plant in the kingdom as part of its strategy to increase aromatics production worldwide, vice president and CEO Mohamed Al-Mady said Wednesday on the sidelines of the K 2007 plastics and rubber exhibition in Dusseldorf, Germany.

The company is already known to be concentrating on boosting olefins production at home, but Al-Mady suggested there were further opportunities to be exploited.

"Aromatics are becoming very important," said Al-Mady. "We have to grow the business fast to complement the styrenics and ABS business."

He offered no further details regarding the benzene plant. However, he said that the company was trying to promote an industry for auto parts in the country, given the abundant availability of feedstocks.

Brian Gladden, CEO of SABIC Innovative Plastic, said a new benzene plant in Saudi Arabia would "give SABIC access to feedstocks and ensure surety of supply."

In the olefins sector, SABIC plans to reach a polyolefin capacity of 9 million mt in Saudi Arabia by 2010, according to vice president of SABIC Polymers Abdulrahman Al-Ubaid. This would take the number of crackers in the area up to 20.

"[Saudi Arabia] is the best place to have polyethylene manufacturing because of the feedstock availability," said Al-Mady.

SABIC has a number of units coming on stream in its home country, including a 500,000-mt/year polypropylene plant at Al Jubail in 2008; new units at Yanbu for 500,000 mt/year of linear low-density polyethylene; 400,000 mt/year of high-density polyethylene; and 400,000 mt/year of PP, also by 2008.
Meanwhile, SABIC's SHARQ affiliate is building plants that will produce 400,000 mt/year each of HDPE and LLDPE from 2008, and SAUDI KAYAN is constructing units with capacity to produce 400,000 mt/year of HDPE; 300,000 mt/year of LDPE; and 350,000 mt/year of PP from 2010.

2008/2/21 MEED

Petrokemya launches new downstream facility

Jubail-based Arabian Petrochemical Company (Petrokemya) is planning to build the region's first acrylonitrile butadiene styrene (ABS) plant at its Jubail olefins complex.

Petrokemya, a wholly-owned affiliate of Saudi Basic Industries Corporation (Sabic), has invited companies for the contract to engineer and build the plant, which will have a capacity of
200,000 tonnes a year (t/y).

The work covers the construction 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 scheme is being supplied by Sabic Innovative Plastics, formerly known as GE Plastics, which Sabic acquired last year.

Butadiene, acrylonitrile and propylene feedstock for the facility are likely to be sourced directly from Petrokemya.

The client says it expects to invite bids for the contract in April, with bids due by the end of June. An award is likely by the autumn.

Once built, the plant will be the first ABS production facility in the Gulf. The joint venture of Saudi Aramco and the US' Dow Chemical Company is also planning an ABS plant at its massive Ras Tanura integrated refinery and petrochemical complex, although that is at a less advanced stage of development.

Middle East producers are increasingly going downstream and integrating their existing production with new products. A shortage of ethane feedstock in the region is also a factor, with producers unable to make high yielding ethylene-based derivatives due to a lack of further gas allocations.

ABS is a thermoplastic commonly used to manufacture rigid, light molded products such as car parts, musical instruments and pipes. Total global ABS capacity is more than 7 million t/y.

2008/6/22 AME Info

SABIC and SINOPEC sign strategic cooperation agreement and agree to expand Tianjin industrial complex

The agreement signed during the visit of Chinese Vice President Xi Jinping (
習近平副主席) is designed to expand the heads of agreement (HOA) signed by the two companies on Jan 31, 2008, whereby SABIC will have 50% of the Tianjin complex joint venture together with a feasibility for adding a new product (polycarbonates) by using raw materials(ビスフェノールA) produced at the complex based on SABIC Innovative Plastics technology.

The agreement also called for joint work in other future projects in China depending on each party capabilities in addition to cooperation in certain areas such as engineering services, project implementation, R&T, product marketing, and material procurement.

Prince Saud bin Abdullah bin Thenayan Al-Saud, Chairman of the Royal Commission for Jubail and Yanbu, SABIC Board Chairman signed for SABIC while Su Shulin, SINOPEC Board Chairman signed for his company.

The complex is expected to be completed in September 2009 with investments exceeding $2.5bn. The overall production capacity of the complex will be approximately 4 million tons of different petrochemical products including 1.2 million tons of ethylene and other products such as poly propylene (PP), butadiene, phenol, and butene-1.

China is the biggest world petrochemical market in light of high growth rates realized by the Chinese economy. SABIC plans to set up a manufacturing center in China to boost its presence in Asia where China represents the biggest market in the Asian continent. This ensures that SABIC is as close as possible to its customers through its products and services. This move follows SABIC's ambition to realize its vision 'To be the preferred world leader in chemicals.'

2008/2/6  SABICの中国進出

SABICは1月31日、Sinopec との間で、50:50のJVを設立して天津にエチレン誘導品コンプレックスを建設する Heads of Agreement を締結したと発表した。同日、北京で両社の会長により調印された。


2007/2/13 GE Plastics、中国のPC計画延期 

2007/7/5の報道では、GE Plastics を買収したSABICは、同社がサウジでPC計画を進めているため、中国での計画をやる考えはないと言明した。

Last month, Sinopec agreed to let South Korea's SK Energy buy a 35 percent stake, which industry experts said was worth roughly $1 billion, in an ethylene complex Sinopec is building in central China.

SABIC, 70 percent owned by the Saudi government, will not be involved in building the 240,000 barrel per day (bpd) Tianjin refinery, company officials have said, which is in line with the petrochemical giant's investment pattern in other regions such as India.

Sinopec and domestic rival PetroChina are set to add at least half a dozen huge crackers, costing some $20 billion by 2010, to cut China's import dependence of nearly half its petrochemical consumption.

July 13 2008 Reuters

Saudi SAFCO and SABIC unit to build steel plant

Saudi Arabian Fertilizers Co (SAFCO) said on Sunday it had signed a deal with a steel unit of Saudi Basic Industries Corp to set up a steel plant with a capacity of 1.7 million metric tonnes a year.

SAFCO and Saudi Iron and Steel Co (Hadeed) would jointly build the plant to produce flat steel products at Jubail, with completion expected in four years, SAFCO said in a statement on the bourse website.

SABIC, the world's biggest chemicals firm by market value, owns 42 percent of SAFCO.
(SAFCO homepage
では、SABIC 41%, SAFCO Employees 10%, Private Saudi Arabian shareholders 49%)

The deal will "reflect positively" on the company's results and help SAFCO maintain its level of profitability, SABIC Chief Executive Mohamed al-Mady said in the statement.
SAFCO's profit surged 125 percent in the second quarter, beating profit forecasts.

Hadeed will also set up a facility with capacity to produce 500,000 tonnes a year of steel rebar (reinforcing bar) and wire rods, bringing the new total capacity to 2.2 million tonnes per year, the company said.

Last year, SABIC said it planned to raise steel output at Hadeed by 22.6 percent to 6.5 million tonnes by 2010.
"This will meet some of the (demand for) products which are imported and currently required for the construction and downstream industries now and in future," Mady said.

A construction boom in the Gulf, fuelled by windfall state revenues from a more than seven-fold rise in oil prices since 2002, is encouraging more steel producers to expand their operations in the region.
Global rebar consumption reached 218 million tonnes last year. Around 65-70 percent of consumption comes from the Middle East and Asia, while the highest consumption per capita is in the United Arab Emirates.
The total value of civil projects in the Gulf is estimated at around $1.5 trillion, and demand for housing is expected to soar on robust population growth, particularly in Saudi Arabia, analysts have said.
Gulf rebar consumption was expected to reach 14 million tonnes this year, a 13 percent increase from 2007.

2008/11/19 albawaba.com

SABIC and ExxonMobil Chemical sign Heads of Agreement for new Elastomers project in Saudi Arabia

Saudi Basic Industries Corporation (SABIC) and affiliates of ExxonMobil Chemical have signed a Heads of Agreement (HOA) and are progressing detailed studies for a new Elastomers project at their petrochemical joint ventures, Kemya and Yanpet.  The agreement was signed by Mansour Al Kharboush, SABIC Vice-President, Specialty Products, and by Robert G. Hutchinson, Vice-President Chemicals, ExxonMobil Saudi Arabia Inc.

The HOA defines the principal terms for the proposed multibillion dollar project including project scope, technology, marketing and feedstock supply.  The project would establish a domestic supply of over 400 KTA of carbon black,  rubber and thermoplastic specialty polymers (EPDM, TPO, Butyl, SBR/PBR) to serve emerging local and international markets.  This project, which includes a vocational training institute and product application development and support center as part of the scope, is aligned with Saudi Arabia's National Industrial Cluster Development Program which is responsible for accelerating growth and diversification of the manufacturing sector, including the automotive manufacturing industry.

Nov 18, 2008 Reuters

Exxon, SABIC sign preliminary rubber deal

Saudi Basic Industries Corp 2010.SE (SABIC) and ExxonMobil Chemical signed a preliminary agreement on Tuesday to set up a multi-billion dollar synthetic rubber joint venture in Saudi Arabia, ExxonMobil said in a statement.

The plant will have a production capacity of 400,000 tonnes. The company said in the statement that detailed studies were progressing for the new elastomers project at SABIC and ExxonMobil's petrochemical joint ventures, Kemya (Al-Jubail Petrochemical Co) and Yanpet (Saudi Yanbu Petrochemical Co).

The statement said Yanpet is a 50-50 joint venture between Mobil Yanbu Petrochemical Co Inc, an affiliate of ExxonMobil Chemical and SABIC, and Kemya is a 50-50 joint venture between SABIC and Exxon Chemical Arabia Inc, an affiliate of ExxonMobil Chemical.

The final decision to implement the project, which will need Board of Direcctor approval from both joint ventures, is subject to completion of more economic feasibility studies and completion of all other statutory procedures, the statement said.

SABIC's executives could not immediately be reached for comment.