Yanbu Industrial City plans $61bn of investment

24 March 2014

Industrial city plans massive outlay aimed at attracting downstream petrochemicals converters

Yanbu Industrial City on Saudi Arabia’s Red Sea coast plans several industrial clusters built over more than 440 square kilometres that aim to increase the industrial diversification of the kingdom.

Speaking at the MEED Petrochemicals 2014 Conference, Alaa Nassif, executive president for the Royal Commission of Jubail & Yanbu (RCJ&Y), said the kingdom’s second-largest industrial city has $61bn of targeted investment.

Much of the investment is aimed at the downstream petrochemicals sector. Planned clusters will include:

  • Polypropylene
  • Polyethylene
  • Butane
  • Benzene
  • Toluene/Xylene
  • Engineered plastics
  • Rubber
  • Carbon fibre
  • Paints and coatings

The inclusion of benzene and butane is confirmation of the plan for Yanbu to play a central role in the kingdom’s plan to integrate refineries with downstream operations to provide essential raw materials.

A PlasChem Park is also planned for Yanbu that hopes to attract downstream converters that can utilise feedstock from the city’s primary anchor tenants in petrochemicals to produce end-user products.

MEED reported in September 2013 that large-scale petrochemicals projects totalling up to $50bn could be constructed in Yanbu. The product slate from these potential projects is expected to feed into the downstream clusters.

Saudi Basic Industries Corporation (Sabic) is also developing technology that would be able to create petrochemicals from crude oil and so bypass the traditional refining process.

A new facility was being planned for Yanbu, which would be in partnership with Aramco and Sabic.

The RCJ&Y is responsible for running Saudi Arabia’s two largest industrial cities. Jubail and Yanbu already produce 10 per cent of the world’s petrochemicals and account for 12 per cent of the kingdom’s GDP.

Yanbu is the third-largest oil refining hub in the world with production of more than 1 million barrels a day (b/d).

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

The industry has concentrated on producing intermediate chemicals aimed at the export market, but the new phase will concentrate on product slates that support Riyadh’s drive to create wealth and employment opportunities for young Saudi nationals.

This will include large anchor industries producing a diverse product range of chemicals that will be then used to feed industrial clusters with raw materials. The clusters include automotive, electrical equipment, plastics, renewable energy and metals.

The MEED Petrochemicals 2014 Conference is being held between 24-25 March in Dubai.

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