TABLE: Ras Tanura latest in Saudi cracker wave

25 May 2007 16:06  [Source: ICIS news]

LONDON (ICIS news)--With Saudi Aramco and Dow Chemical’s giant Ras Tanura petrochemicals project confirmed earlier this month it became the latest a in surge of Saudi crackers due to come on stream in the next decade.

Over 14m tonnes/year of new capacity is expected to start up by 2015, making use of the world’s cheapest gas feedstock and changing the face of the global olefins and olefin derivatives market.

Producers in Europe and the US can expect difficult times ahead if Middle East capacities – including large projects in Iran, Qatar, Oman, Kuwait and Abu Dhabi – to come on stream as planned.

The Middle East is expected to double its share of global polyethylene (PE) and polypropylene (PP) output to 21% and 14% respectively by 2011.

Polyolefins producer Basell earlier this week predicted that the Middle East would be the only regional net exporter of both PE and PP by 2011.

Many olefins and derivatives producers in the US and Europe have warned of a downturn in 2009 when the bulk of new projects will have started up, with profitability and operating rates expected to decline to the lull period of 2000-2003.

Ethane and propane gas will be the feedstock of choice for the majority of new crackers due to its significant price advantage over heavier sources - value which can be passed on to downstream production.

However, the rate of investment in crackers could put pressure on the availability of ethane, which relies on the continued pace in Saudi Aramco’s oil field developments.

Many projects have been delayed due to soaring engineering, procurement and construction (EPC) prices, with the price of a world scale ethylene cracker thought to have doubled since 2000.

Saudi cracker projects

Venture	Site	Cost ($m)	Olefins capacity (000 tonnes/ year)	Feedstock	Projected start-up
Jubail Chevron Phillips	Jubail	-	300 ethylene	Condensate/ Naphtha	2008 Q1
YanSab (SABIC subsidiary)	Yanbu	-	1,300 cracker, 400 propylene	Ethane/ Propane	2008
Sharq (SABIC/Mitsubishi)	Jubail	-	1,300 cracker	Ethane/ Propane	Mid-2008
Petro-Rabigh (Aramco/Sumitomo)	Rabigh	10,000	1,300 cracker, 900 propylene	Ethane/ Offgas	H2 2008
Tasnee & Sahara	Jubail	-	1,300 cracker, 285 propylene	Ethane/ Propane	Q4 2008
Saudi Kayan	Jubail	9,000	1,300 cracker, 550 propylene	Ethane/ Butane	2009
Saudi Chevron Phillips	Jubail	3,000	1,165 cracker, 450 propylene	Ethane/ Propane	Q4 2009
Petrokemya (SABIC)	Jubail	-	1,300 cracker	Pending	2010-2011
Sipchem	Jubail	7,000	1,300 cracker	Ethane/ Propane	2011
Al-Rajhi Petrochemical	Jubail	4,000	1,000 cracker, 500 propylene	Ethane	2011
Saudi Aramco/Dow	Ras Tanura	20,000	1,400 cracker	Ethane/ Naphtha	2012
INEOS	Jubail	2,000+	1,300 cracker	Pending	Delayed from 2012
Saudi Aramco - in talks with SABIC	Yanbu	-	Undis- closed cracker project	Pending	2015

By: Mark Watts
+44 20 8652 3214

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