New Saudi cracker, petchem hub planned

27 October 2005 13:05  [Source: ICIS news]

By Malini Hariharan

MUMBAI (ICIS news)--Saudi International Petrochemical Co (Sipchem) plans to build a large olefins complex at Al-Jubail 2, a new industrial city being developed by the Saudi government, said a Sipchem source.

Central to the complex would be a cracker of approximately 1.2m tonne/year. There would also be plants for various derivatives including polyethylene (PE) and acrylonitrile (ACN).

"The cracker should be completed towards the end of 2010 while some of the downstream units would be ready in 2011," he told ICIS news. "The project is still under evaluation as a feasibility study is currently being carried out."

But the privately owned Saudi company has already applied to the government for land at Al-Jubail 2, which is expected to house many other petrochemical projects besides the one mooted by Sipchem.

"The existing Jubail industrial city is fully built up so a new site is being developed," the source added.

According to local media reports, the government has allocated $3.73bn to develop the new 16sq km industrial zone. It expects to attract another $56bn of private investments at this site over the next two decades.

Sipchem has also applied to Saudi Aramco and the Ministry of Petroleum and Mineral Resources for feedstock supply to the new cracker.

"Our application is being reviewed; we are anxiously waiting for their decision," said the source.

Although Sipchem is developing the project independently, the source said the company is open to the idea of joint ventures for the downstream units.

Given the number of crackers being planned in the Middle East and the pressure that this has put on resources such as manpower and materials, the source admitted that the 2010 start-up target was risky.

"Fortunately, all our other projects are on schedule and we hope to keep up with the plan for this one too," he said.

Sipchem is currently working on an integrated acetyls project at Al-Jubail. It has already signed technology agreements for acetic acid and vinyl acetate monomer (VAM) units with Eastman Chemicals and DuPont respectively.

Engineering and construction contracts for the project are due to be awarded by January 2006 and the project is planned for completion in 2008.

Sipchem has also taken a small stake in a 1m tonne/year cracker being built by Tasnee Petrochemical at Al-Jubail. This project is also due to be commissioned in 2008.

John Richardson contributed to this story.

By: Malini Hariharan
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