Petro Rabigh shuts polypropylene plant on propylene shortage

05 August 2010 14:43  [Source: ICIS news]

SINGAPORE (ICIS)--Rabigh Refining and Petrochemical Co (Petro Rabigh) has shut down its polypropylene (PP) plant in Rabigh, Saudi Arabia, due to a shortage of the feedstock propylene, sources close to the company said on Thursday.

“The company’s propylene stocks are sharply down following an outage early this week at its fluid catalytic cracker (FCC),” said one of the sources.

The FCC unit provides propylene to Petro Rabigh’s 700,000 tonne/year PP plant. The company’s total installed propylene capacity is 900,000 tonnes/year.

The PP plant’s unplanned shutdown has tightened the supply of PP in the Middle East market, traders said.

“Supply of PP is quite restricted at the moment, and prices are climbing up this week,” said a Dubai-based trader.

Offers for raffia-grade PP into the Gulf Cooperation Council (GCC) region have surged by $50-100/tonne (€38-76/tonne) from a week ago to $1,250-1300/tonne CFR (cost and freight), the trader said.

Most business for August, however, was already concluded last week at $1,200-1,230/tonne CFR GCC.

Petro Rabigh, a joint venture between state-owned Saudi Aramco and Japan’s Sumitomo Chemical, operates a cracker complex at Rabigh, on Saudi Arabia’s western coast.

In addition to the propylene and PP facilities, Petro Rabigh’s complex houses a 1.3m tonne/year ethane cracker, a 300,000 tonne/year high density polyethylene (HDPE) line, a 600,000 tonne/year linear low density polyethylene (LLDPE) line and a 700,000 tonne/year monoethylene glycol (MEG) plant.

($1 = €0.76)

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By: Prema Viswanathan
+65 6780 4359

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