Saudi Arabia’s two biggest companies, Saudi Aramco and Saudi Basic Industries Corporation (Sabic), are pressing ahead with plans to build their first joint venture petrochemicals plant at Yanbu on the Red Sea coast of the kingdom.

A feasibility study has been carried out for the scheme, which will see the two companies build a plant next to Aramco’s existing Yanbu refinery.

“This project has been in the planning stages for some time and now it is likely that the joint venture will be an aromatics plant that will complement the offtake of the adjacent refinery,” says an oil industry source based in Saudi Arabia. “Aramco will be responsible for the refinery and its rehabilitation and then team up with Sabic for the aromatics.”

The source adds that the market expects tenders for the front-end engineering and design (feed) to be released for the scheme in early 2013.

The Yanbu refinery is due to undergo rehabilitation as part of the Aramco’s clean fuels programme. The scheme will lower the sulphur content of the refined products and will also provide new streams of feedstock that can be used for petrochemicals production.

Saudi Arabia feedstock, 2007
Ethane 73%
Butane 1%
Naphtha 10%
Propane 16%
Source: Al-Rahji Capital 

The project is similar to Aramco’s Ras Tanura refinery clean fuels and aromatics project in the Eastern Province.  The US’ Jacob’s Engineering is carrying out the feed at Ras Tanura and engineering, procurement and construction (EPC) contracts will be released in late 2012.

The Yanbu refinery is not as large in scale as the 550,000 barrel-a-day (b/d) Ras Tanura refinery, but still produces a significant 235,000 b/d. This makes a petrochemicals plant viable in terms of economies of scale.

Aromatics are one of the most basic petrochemicals and are mostly made up of benzene. Benzene is used to produce heavy chemicals such as cumene. Aramco is establishing a reputation as a major petrochemicals producer with a number of high-profile projects in the kingdom that involve joint ventures with major international chemical companies. These include the PetroRabigh project with Japan’s Sumitomo Chemical on the west coast of the kingdom and the Sadara Chemical Company, which is a joint venture with the US’ Dow Chemical.

Saudi Arabia feedstock, 2014*
Ethane 65%
Butane  5%
Naphtha 10%
Propane 20%
*=Estimate. Source: Al-Rahji Capital 

Sabic is the world’s second largest diversified chemical company. It is 70 per cent owned by the Saudi Arabian government, with the remaining 30 per cent of its shares traded on the Riyadh stock exchange.