By John Richardson
One wonders what might be the future of the Saudi Aramco and Dow Chemical project in Saudi now that it has been officially confirmed that it might be relocated from Ras Tanura to Al-Jubail because of escalating costs.
An ICIS news report earlier this week said that the proposed complex could be downsized from two crackers to one - but that an ethane/naphtha feedstock mix was to still under evaluation.
But the blog was told by a source familiar with the project that this could become an ethane-only cracker.
If this is the case how would this fit in with the Saudi objective of diversifying the range of petrochemicals it produces through moving away from predominantly ethane-only feedstock?
Aramo perhaps only gained one of the remaining ethane feedstock allocations (the gas is long-term severe short supply for new projects) on the basis that it would do something more different downstream than the standard polyethylene (PE) and mono-ethylene glycol (MEG) derivatives that have so far dominated the Kingdom's petrochemicals industry.
And if this becomes purely a gas cracker project then obtaining technologies downstream could be less of an issue (the current project's configuration involves lots of technologies Dow owns that cannot be easily licensed, including a Saudi move into chlorine chemistry).
If this remains a mixed-feed project it will be interesting to attempt to discover on what terms the naphtha raw-material is priced. Some consultants argue that naphtha cracking has no cost advantage in Saudi Arabia versus shipping the feedstock to Asia for cracking there instead.
But, of course, there is the wider agenda in Saudi of overall industrial diversification to create jobs, starting with petrochemicals.