Satorp considers plans for petrochemicals phase two

28 November 2011

Refinery project in Jubail could complement neighbouring Sadara Chemical Company as major producer

The Saudi-French joint venture Saudi Aramco Total Refining and Petrochemical Company (Satorp) is considering plans to expand its operations into large-scale petrochemicals production at its site at Jubail, in the Eastern province of Saudi Arabia.

The plans for a second phase of the $9.6bn refinery project are still in their infancy and no decisions have yet been made by Saudi Aramco and France’s Total, the joint venture partners behind Satorp. The first phase, which will largely produce refined petroleum, is still under construction and is not due for completion until late 2013.

Already sources have indicated Satorp is looking at an expansion project. Any chemicals produced in a phase two would have to complement the offtake from the neighbouring Sadara Chemical Company complex being built by Aramco and the US’ Dow Chemical.    

“Satorp is looking at some petrochemicals expansion and Total is very keen to pursue this strategy, but a detailed feasibility study will have to be done first before any decision will be made,” says a source working in the kingdom’s oil and gas industry. “There shouldn’t be any problem regarding a conflict of interest with Sadara, as there are plenty of chemicals that complex will not be making.”

When contacted by MEED, Satorp president, Mohammed Hammad, declined to comment on any speculation over phase two plans for the refinery project. “That is not a subject I can comment on and any [decisions on] phase two is a matter for Total and Aramco to decide,” says Hammad. “All I can comment on is how well the first phase is progressing.”

Hammad says the Satorp refinery project has now passed 50 per cent construction and is on line to meet its start-up target date of late 2013. The Satorp refinery has been under construction since the second quarter of 2009 when the construction packages were awarded after a nine-month delay, due to an effort to reduce costs (MEED 18:6:11).

The scope of works involves the construction of a 400,000 barrel-a-day refinery complex that will produce a diverse product mix when completed. About 72 per cent of the offtake will be gasoline and diesel. Jet fuels will also be produced, as well as some base petrochemicals, including paraxylene, benzene and propylene. Some of the gasoline and diesel will be exported and the rest used to meet booming domestic demand (MEED 16:9:11).  

The petrochemicals produced will be sold to the Sadara Chemical Company as feedstock and to other petrochemicals producers in the kingdom. If Satorp wants to produce extremely large volumes of petrochemicals, it would have to do that as part of a phase two project, as these plans have not been factored into the current Satorp refinery.

“The most important factor for this kind of production is the gas price,” the source says. “If [Satorp] can negotiate a similar deal to the one Sadara is getting, then it will make it extremely feasible.” Aramco retains a 62.5 per cent share in Satorp, with Total owning the remaining 37.5 per cent.

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