SABIC 2008 Saudi ethylene projects on track - CEO

05 November 2007 21:13  [Source: ICIS news]

By John Waggoner

HOUSTON (ICIS news)--Saudi Basic Industries Corporation’s (SABIC’s) ethlyene projects that are scheduled for completion in Saudi Arabia in 2008 are mostly on track but start-up could be delayed until the second half of the year, chief executive Mohamed al-Mady said on Monday.

“All plans are going forward, but there were delays and increased cost in some of the plants that we have planned,” al-Mady said in an interview. "We will see our two largest crackers coming mid-year next year."

He said projects in the kingdom share with others in the Middle East concerns about scarcity of manpower, increased material costs, high energy prices and transportation costs.

Four ethylene projects are planned to go on stream in 2008 in the kingdom, including SABIC's ventures in Eastern Petrochemical (Sharq), a 1.3 m tonne/year facility, and Yanbu National Petrochemical (Yansab), a 1.3m tonne/year facility.

“Contractors are still stretched out so we are very lucky that the delays are still manageable and the increased costs are still manageable, so most of our plans will materialise in the second half of next year,” he said.

SABIC also seeks new benzene production capacity in the kingdom as a strategy to keep pace with rising demand for the product.

“We know benzene prices will increase,” he said.

Without providing estimated production capacities, al-Mady said that SABIC was in the early stages of figuring out where to source feedstock for opportunities in benzene projects.

He suggested that SABIC would likely obtain feedstock from the contemplated expansion of Saudi Aramco’s refining capacity in the kingdom or even by taking part in Dow Chemical's and Aramco's Ras Tanura project planned for 2012.

“I think there will be benzene coming from the kingdom in the future,” al-Mady said.

By: John Waggoner
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