14 May 2007 17:54 [Source: ICIS news]
LONDON (ICIS news)--The Dow, Saudi Aramco, feedstock and chemicals joint venture project for Ras Tanura sets the scene for a new developmental period for the chemical industry.
The petrochemicals business has been dominated for years by talk of the feedstock-derived competitive advantage of gas-based players in the ?xml:namespace>
The wave of new capacity expected from the region has been pushed back but will crash ashore starting in 2008/09.
New production volumes will be absorbed most easily if
The plans for Ras Tanura on
The project will broaden the base of
Part of a wider development plan, the Ras Tanura chemicals project has already been called a “next generation venture” with a new production model.
Integrated into Saudi Aramco’s 550,000 bbl/day refinery it will involve the construction of new power generation facilities, ethane extraction and chemicals plants.
Dow last year was talking of a 2012 on-stream date. Industry sources have put the project cost at $20bn (€14.8bn).
The Ras Tanura development will add new value chains and products to
Initially, the project scope includes world-scale plants for polyethylene, ethylene oxide and glycol, propylene oxide and glycol, chloralkali, vinyl chloride monomer, polyurethane components, epoxy resins, polycarbonate, amines and glycol ethers.
Dow and Saudi Aramco said on Saturday the plants will be integrated with the Saudi Aramco refinery and the Ju’aymah gas processing plant, two of the largest facilities of their kind in the world.
The upstream integration is key but of possibly more importance is the way the new plants feed into
“The wide range of chemical materials and plastics to be produced by the joint venture will help spawn other downstream chemical conversion industries,” Saudi Aramco president and chief executive Abdallah S Jum’ah said.
“The downstream industries to be fed by the materials to be manufactured by the joint venture will assist in further expanding the national economic base while promoting economic diversification and capitalising on the vast job creation potential of these industries,” he added.
Dow brings to the development project an almost full chemistry set and is clearly keen to further develop its
Dow admitted last year that this will be a long trip.
The new enterprise will have a long-term, secure and reliable feedstock position, Dow chairman, Andrew Liveris, has stressed. The expectation is that it will be positioned to lift its product sales locally.
Dow is taking a step in the dark on that front.
In chemicals, feedstock advantage is one thing, proximity to market another. Ideally there is a healthy combination of both.
Saudi Aramco wants to create new value in chemicals and is clearly in the position to do so.
“If we decide to export crude, then others will build; if we decided to export in a different form then we will capture value,” director of the company’s new business evaluation department, Azzam Shalabi, said last year.
Saudi Aramco and Dow should be setting off on a long journey together. The detailed memorandum of understanding sets out many of the technical factors of the project. The companies now simply have to negotiate the joint venture itself.
($1 = €0.74)
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