Saudi’s Sharq cuts LLDPE production on tight C2

31 July 2008 10:40  [Source: ICIS news]

SINGAPORE (ICIS news)--Saudi Arabia's Eastern Petrochemical (Sharq) is running both its linear low density polyethylene (LLDPE) lines in Al-Jubail at low operating rates due to a shortage of feedstock ethylene, a source close to the company said on Thursday.


The combined capacity of the two LLDPE lines is 750,000 tonnes/year.


One of the lines, which was shut down on 23 July, was restarted this week, the source said.


“But its operating rate cannot be ramped up due to feedstock supply constraints,” the source said.


The outage had aggravated the tight supply situation for LLDPE in the Middle East, causing prices to surge by close to 7% for August shipments, traders said. 


Sharq officials were not immediately available for comment.


The ethylene shortage was caused by the shutdown of Petrokemya No 1 cracker, one of Sharq’s feedstock providers, a second source said.


The Al Jubail-based cracker, wholly owned by Saudi Basic Industries Corp (SABIC), went down last week due to a power outage, sources close to SABIC said.


However, all the plants at Al-Jubail affected by the outage were expected to resume normal production in the next few days, SABIC said.


The shutdown could result in surplus ethylene from Saudi Arabia being offered into the southeast (SE) Asian market, a Singapore-based olefins trader said.


Sharq, a 50:50 joint venture of Saudi Basic Industries Corp (SABIC) and SPDC, a Japanese consortium headed by Mitsubishi Corp and Mitsubishi Chemical, also operates a 1.3m tonne/year cracker at Al-Jubail.


Peh Soo Hwee contributed to this story

For more on LLDPE, C2 visit ICIS chemical intelligence
Please visit the complete ICIS plants and projects database


By: Prema Viswanathan
+65 6780 4359

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