SABIC considers second HDPE plant for Saudi Kayan complex

29 March 2011 17:37  [Source: ICIS news]

LONDON (ICIS)--SABIC is considering building another 300,000 tonne/year high density polyethylene (HDPE) plant at the Saudi Kayan complex in Al-Jubail, a senior executive with the Saudi Arabia-based petrochemical major said on Tuesday.

The project, if approved, will feed expanding demand from downstream industries in the region – as well as exports – and would double SABIC’s HDPE capacity at the site to 600,000 tonnes/year, according to Khaled al-Mana, the company’s executive vice president for polymers.

“We are under the planning process and have no specific date [for start up],” Al-Mana said, adding that the company expects to decide later this year whether to proceed with the project.

“The Middle East has an evolving downstream market with high potential. We see regional market growth of 7-8% per year for polymers and up to 10% per year for HDPE. The Middle East consumes 2m tonnes/year of thermoplastics,” he said.

The Saudi government has initiated a cluster programme to stimulate the growth of downstream sectors focused on automotive, construction, metal, plastic packaging and consumer applications.

“We want to develop high quality employment in [Gulf Cooperation Countries] countries for our young generation,” Al-Mana added.

Commenting on other projects, Al-Mana said the Tianjin joint venture with Sinopec started up in May 2010  and has achieved average capacity utilisation of 87%. “We expect it to be running flat out by the end of the year,” he added.

Al-Mana said SABIC was not altering any of its production plans as a result of the ongoing troubles in the Middle East.

“We are always sad when there is unrest in the region but are confident that it will be short-lived. We have always managed to continue production [during other conflicts]. Our production plans will not be changed.”

The Saudi Kayan facility has 1.48m tonnes/year of ethylene capacity, 630,000 tonnes/year of propylene, and 700,000 tonnes/year of polyethylene (PE).

Saudi Kayan is a joint venture between SABIC, which holds 35% of its stock, and Al-Kayan Petrochemical, which owns 20%. The remainder was sold for public subscription.

For more on SABIC visit ICIS company intelligence
For more on polyethylene visit ICIS chemical intelligence

By: Will Beacham
+44 20 8652 3214

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