Saudi Basic Industries Corporation (Sabic) and the UK/Dutch Shell Group have scrapped plans to build a polyurethane plant at the Saudi Arabia Petrochemical Company (Sadaf) complex at Jubail in Saudi Arabia.

The joint venture partners had already taken over two years to make any progress. However, MEED reported in March that the US’ KBR had been awarded the front-end engineering and design (feed) and that the scheme was moving forward.

Sabic and Shell said that the expansion to their current operations will not go ahead due to feasibility issues, although they did not discount future projects.

The budget for the project had been estimated at $3bn and the units that were set to be indluded were:

  • Toluene diisocyanate (TDI)
  • Methylene diphenyl diisocyanate (MDI)
  • Polyol
  • Polyurethane
  • Offsites and utilities

Polyurethane is derived from monomers and combines the qualities of rubber and plastic. Uses for the material include high-performance adhesives, synthetic fibers, insulation panels, seals and gaskets, as well as several applications in the automotive industry.

The Sadaf complex has been in operation since 1985 and is a 50:50 joint venture between Sabic and Shell. The complex’s current offtake includes ethylene, crude industrial ethanol, styrene, caustic soda and ethylene dichloride.

MEED reported in early March that Sabic was formulating several initiatives aimed at harnessing the kingdom’s petrochemicals for domestic use.

Saudi Arabia’s petrochemicals industry is the largest in the region and is worth $354bn, a third of the value of the Saudi Stock Exchange (Tadawul).