The region’s largest petrochemical producer, Saudi Basic Industries Corporation (Sabic), is enjoying the good times. Boosted by record output and profits in 1994, the joint stock company is embarking on a series of major projects involving the expansion of existing capacity and the introduction of new products.

Last year, petrochemicals accounted for about half of Sabic’s total production of 20.7 million tonnes. The 35 per cent increase in total Sabic output, coupled with an improvement in world petrochemical prices, resulted in net profits and turnover almost doubling to $1,120 million and $5,190 million, respectively.

One element of Sabic’s strategy over the next 12 months will be to continue the process of consolidating and expanding its primary petrochemical production. The company and its 13 petrochemical and plastic affiliates are aiming to benefit from further economies of scale, and are launching second and third generation expansion projects.

Indicative of this approach is the National Methanol Company (Ibn Sina). The 50:50 joint venture between Sabic and the US’ CTE Petrochemicals Company completed its first methanol plant in 1984 at a cost of $380 million. Subsequent debottlenecking raised output to more than 900,000 tonnes a year (t/y) from 650,000 t/y. A decade later, a $350 million, 700,000-t/y methyl tertiary butyl ether (MTBE) plant was added at the Jubail site. Now, Ibn Sina is studying a 1 million t/y expansion of its methanol capacity by building a $300 million unit, next to its existing production facilities.

Nearly all of Sabic’s other petrochemical affiliates are either implementing or studying major expansions. They include:

Saudi Methanol Company (Ar-Razi). The 50:50 joint venture between Sabic and a Japanese consortium, headed by Mitsubishi Gas Chemical, signed in early April an engineering, procurement and construction (EPC) contract with Mitsubishi Heavy Industries to build the company’s third methanol plant. Due to be completed by mid-1997, the 850,000-t/y plant will raise Ar-Razi’s methanol capacity to around 2.2 million t/y from the current 1.3 million t/y.

Saudi Petrochemical Company (Sadaf). The joint venture between Sabic and Shell Oil of the US is due to complete a $1,000 million-plus expansion programme in 1996. This will raise the company’s ethylene dichloride (EDC) capacity to 840,000 t/y, its styrene capacity to 460,000 t/y and its caustic soda capacity to 680,000 t/y. A new 700,000-t/y MTBE unit is also under construction as part of a programme managed by Brown & Root. Industry sources say that Sadaf is studying two other projects. These are a worldscale aromatics complex and a 500,000-1 million t/y expansion of ethylene capacity, which presently stands at around 700,000 t/y.

Saudi Yanbu Petrochemical Company (Yanpet). The Sabic/Mobil Corporation venture is planning a $1,000 million upgrade of its ethylene-based plant, which produces around 600,000 t/y of ethylene, 430,000 of linear low-density polyethylene (LLDPE) and high-density polyethylene (HDPE) and 250,000 t/y of ethylene glycol. The project is awaiting approval from the shareholders, although ABB Lummus Crest has already been selected to provide the ethylene technology licence.

Al-Jubail Petrochemical Company (Kemya). The Sabic/Exxon Corporation venture produces more than 400,000 t/y of LLDPE and HDPE. A further 200,000- t/y expansion of LLDPE capacity is expected.

Arabian Petrochemical Company (Petrokemya). The 100 per cent-owned Sabic affiliate is proceeding with two projects. A second 50,000-t/y butene- 1 plant is near completion. The other scheme involves the expansion of the olefins plant by 200,000 t/y to 700,000 t/y. The $30 million project is scheduled to be completed by Hitachi Babcock of Japan in late 1996.

The other aspect of Sabic’s growth strategy is the expansion of its product base. A key element is the introduction of an aromatics capability, which will virtually complete the company’s portfolio of hydrocarbon products and open up new opportunities for downstream manufacturing in the kingdom.

Aromatics

Arabian Industrial Fiber Company (Ibn Rushd) has responsibility for implementing the kingdom’s first aromatics and purified terephthalic acid (PTA) complex in Yanbu. Construction contracts on the estimated $800 million project are expected to be placed by late summer, allowing the plants to be operational in late 1997.

The project’s completion will mark an important milestone in Sabic’s attempts to establish more integrated petrochemical facilities. The aromatics plant, which will be based on the cyclar technology license, developed jointly by UOP and The British Petroleum Company (BP), will produce four main products: 300,000 t/y of paraxylene, 350,000 t/y of benzene, 45,000 t/y of orthoxylene and 35,000 t/y of metaxylene. Of these, the paraxylene will be used as feedstock for the 350,000-t/y PTA plant. The PTA will then be used as feedstock for another Ibn Rushd project, a 140,000-t/y polyester fibre plant. This is scheduled to be completed by October.

Sabic is also following the same integrated approach in developing its downstream petrochemical capacity. The company’s push into the plasticisers market is being headed by the Al-Jubail Fertiliser Company (Samad).

In the autumn, the company is scheduled to bring on stream a 150,000- t/y di-ethyl hexanol (2-EH) plant, which will use propylene supplied by Arabian Petrochemical Company (Petrokemya).

Completion of the plant will be followed nine months later by the commissioning of a 50,000-t/y di-octyl phthalate (DOP) unit. The new $30 million plant will use 2-EH as feedstock and will be built by two Japanese companies, Mitsubishi Corporation and Mitsubishi Kakoki Kaisha. DOP is a liquid plasticiser for polyvinyl chloride (PVC).