The Saudi petrochemical sector will witness a massive increase in capacity in H2 2008, securing the country's position as a global petrochemicals supplier, according to BMI's latest Saudi Arabia Petrochemicals Report. Jubail and Yanbu will be the focus of petrochemicals developments over the medium-term. The US$10 billion first phase of the PetroRabigh complex, a joint venture (JV) between Saudi Aramco and Sumitomo Chemical, is due to come online by end-2008, manufacturing 1.3 mln tpa of ethylene and 900,000 tpa of propylene. Other downstream units include three 300,000 tpa PE plants; two 350,000 tpa PP facilities; a 200,000 tpa propylene oxide (PO) plant; a 600,000 tpa EG unit and a butane-1 unit. The partners are also planning a US$4-5 billion second phase, consisting of plants producing 16 downstream products including an aromatics complex and units manufacturing intermediates.
Petrochemical developments will continue into 2009 with Saudi International Petrochemical Company (Sipchem)'s US$1.06 billion acetyls complex in Jubail. The Yansab complex is due to come on-line in Q4 08, adding more than 4 mln tpa in petrochemicals capacity, including 1.3 mln tpa of ethylene; 400,000 tpa of propylene, 900,000 tpa of PE, 770,000 tpa of EG and 400,000 tpa of PP, as well as butane, benzene, xylene and toluene mixtures. At the same time, Tasnee Petrochemicals is set to bring online a 1mln tpa ethylene facility, supplying a complex that will include 400,000 tpa of HDPE and 400,000 tpa of LDPE. Sabic affiliate, Saudi European Petrochemical Company (Ibn Zahr) is also planning to open a 500,000 tpa PP plant at Jubail by end-2008. The Sabic Eastern Petrochemical Company (Sharq) is planning to bring new plants online in H2 08, including 1.3 mln tpa of ethylene, 700,000 tpa of EG, 400,000 tpa of HDPE and 400,000 tpa of LLDPE.
Sharq's overall annual capacity is expected to exceed 4.9 mln tpa, and it will be the world's largest producer of ethylene glycol at one site. Saudi Aramco is planning to invest about US$130 billion by 2012 on a number of crude oil, gas, refining and petrochemical projects, according to an announcement in May 2008. This compares to US$90 billion announced in previous statements. Of the total, 54% will be invested in JVs both in Saudi Arabia and abroad, with the remaining 46% spent on projects started by Saudi Aramco alone. The main projects include the second phase of the PetroRabigh petrochemical complex and a petrochemical complex at Ras Tanura, as well as various JVs in China. By 2012, further developments will see ethylene production capacity rise to 19.67 mln tpa and polymer production capacity to at least 14.66 mln tpa. Our projections for petrochemical capacity are based on currently planned projects, but it is possible that some may not come to fruition due to the restriction on ethane feedstock and a possible downturn in the Chinese market at a time of rising Chinese capacities. Consequently, it is possible that ethylene capacity may reach only 18 mln tpa by 2012. Analysts fear that the availability of the sector's preferred feedstock, ethane, could decline. The requirements of planned projects in the Kingdom exceeds the level of feedstock available over the forecast period, unless the gas production capacity is substantially increased, which is unlikely in the next five years. Moreover, Saudi Aramco's venture into the petrochemicals sector could lead to cuts in the availability of ethane to its rivals. Other sources of feedstock will have to be used, pushing up plant costs and threatening to make some projects unviable.
Petrochemical developments will continue into 2009 with Saudi International Petrochemical Company (Sipchem)'s US$1.06 billion acetyls complex in Jubail. The Yansab complex is due to come on-line in Q4 08, adding more than 4 mln tpa in petrochemicals capacity, including 1.3 mln tpa of ethylene; 400,000 tpa of propylene, 900,000 tpa of PE, 770,000 tpa of EG and 400,000 tpa of PP, as well as butane, benzene, xylene and toluene mixtures. At the same time, Tasnee Petrochemicals is set to bring online a 1mln tpa ethylene facility, supplying a complex that will include 400,000 tpa of HDPE and 400,000 tpa of LDPE. Sabic affiliate, Saudi European Petrochemical Company (Ibn Zahr) is also planning to open a 500,000 tpa PP plant at Jubail by end-2008. The Sabic Eastern Petrochemical Company (Sharq) is planning to bring new plants online in H2 08, including 1.3 mln tpa of ethylene, 700,000 tpa of EG, 400,000 tpa of HDPE and 400,000 tpa of LLDPE.
Sharq's overall annual capacity is expected to exceed 4.9 mln tpa, and it will be the world's largest producer of ethylene glycol at one site. Saudi Aramco is planning to invest about US$130 billion by 2012 on a number of crude oil, gas, refining and petrochemical projects, according to an announcement in May 2008. This compares to US$90 billion announced in previous statements. Of the total, 54% will be invested in JVs both in Saudi Arabia and abroad, with the remaining 46% spent on projects started by Saudi Aramco alone. The main projects include the second phase of the PetroRabigh petrochemical complex and a petrochemical complex at Ras Tanura, as well as various JVs in China. By 2012, further developments will see ethylene production capacity rise to 19.67 mln tpa and polymer production capacity to at least 14.66 mln tpa. Our projections for petrochemical capacity are based on currently planned projects, but it is possible that some may not come to fruition due to the restriction on ethane feedstock and a possible downturn in the Chinese market at a time of rising Chinese capacities. Consequently, it is possible that ethylene capacity may reach only 18 mln tpa by 2012. Analysts fear that the availability of the sector's preferred feedstock, ethane, could decline. The requirements of planned projects in the Kingdom exceeds the level of feedstock available over the forecast period, unless the gas production capacity is substantially increased, which is unlikely in the next five years. Moreover, Saudi Aramco's venture into the petrochemicals sector could lead to cuts in the availability of ethane to its rivals. Other sources of feedstock will have to be used, pushing up plant costs and threatening to make some projects unviable.
