LONDON (ICIS)--INEOS is to take its first steps into Middle Eastern production, with plans for $4bn of downstream production units in Saudi Arabia by 2025, the Switzerland-headquartered petrochemicals producer said on Monday.
The company has agreed to develop three new world-scale plants in the country, including the first acrylonitrile (ACN) capacity in the Middle East, the company said.
Representing a diversification beyond INEOS’ traditional Europe and US operational base, the units will be developed as part of the cracker and petrochemicals projetc being developed in Jubail by Total and Saudi Aramco.
INEOS signed an agreement to develop a new 425,000 tonne/year ACN plant as well as a 400,000 tonne/year Linear Alpha Olefin (LAO) plant and associated world-scale Poly Alpha Olefin (PAO) unit as part of the Jubail 2 complex.
The ACN plant will be the first of its kind in the Middle East when it starts up in 2025. The LAO and PAO units are also slated to start production that year.
"The three world-scale plants will produce the key building blocks for carbon fibre, engineering polymers and synthetic lubricants that are pivotal to economic growth in the region," it said.
Used in engineering plastics common in the automotive sector, ACN is also a precursor to synthetic rubber, a market Aramco has significantly widened its foothold in with the full acquisition of LANXESS’ operations in the space.
The buy-out of LANXESS’ 50% stake ahead of schedule was prompted by the ambitious expansion plans that Aramco has for the ARLANXEO business at the time when the Germany-based partner was looking to move out of the sector, according to CEO Matthias Zachert earlier this year.
“Global demand for acrylonitrile continues to grow ahead of GDP, to meet the demand for lighter, stronger, energy efficient materials such as ABS [acrylonitrile butadiene styrene], composites and carbon fibre,” said INEOS Nitriles chief Joe Walton.
Saudi Aramco and Total are preparing the construction of a $5bn petrochemical complex (Project Amiral), scheduled for completion in 2024.
Located next to the SATORP joint venture run by the two companies, the complex is expected to include a1.5m tonne/year cracker utilising around 50% externally-sourced ethane and 50% refinery offgases.
Officials said last month that the companies are looking at ethylene, propylene, isobutylene, polyethylene (PE) and polypropylene (PP) units at the site as part of the $4bn of downstream derivatives and speciality slated for development of the site, although plans remain in the early stages.
Aramco had expressed plans for an additional $4bn in additional third party investment, and had already signed a memorandum of understanding (MoU) with Daelim for the South Korea-based producer to develop an 80,000 tonne/year polyisobutylene (PIB) downstream of Amiral by 2024.
The project in Saudi Arabia follows INEOS' announcement of €3bn investment into a new plant at Antwerp, £1bn investment across the UK, acquisitions in China and capacity increases in the US Gulf Coast, Alabama and Chocolate Bayou facilities.
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(Pictured: The Jubail 2 development. Source: INEOS)
(Map source: Total)
Additional reporting by Nurluqman Suratman