Foundations for success

Sadara
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Sadara

A major new production complex in Saudi Arabia’s east coast petrochemicals hub is about to propel the GCC chemical industry into a new era

John Baker

By John Baker, London

Sadara Chemical Company’s $20bn investment will see the region’s first mixed-feed cracker in operation, making possible the production of a wide range of downstream chemicals. Many of these will be specialty products made for the first time in Saudi Arabia, if not the GCC region as a whole.

Sadara is designed to be an equal joint venture between Saudi Arabia’s energy major Saudi Aramco and US-based The Dow Chemical Company, with a public offering of shares to come later.

The Sadara complex is a game changer in many ways, declares company CEO Ziad Al-Labban. Not only does it mark the first use of liquid refinery streams as feedstock for a cracker in the region, but 14 of its 26 world scale production units will be making products not locally available before.

The product portfolio moves the GCC chemical industry into more value-added, specialty products, a capability designed to help encourage new downstream investments in Saudi Arabia. To stimulate this further Sadara and the Royal Commission for Jubail and Yanbu are collaborating in the establishment of PlasChem Park, a plastics and chemical value park next to the Sadara complex.

But there are more game-changing aspects to the way Sadara has approached the overall investment, he notes. This venture is beginning to drive further cooperation between existing facilities in Jubail, and to increase operational flexibility and integration. This includes, but is not limited to, the creation of a C2/C3 olefins network in the area, such as exists in the US Gulf Coast.

Sadara is also adopting a partnership approach to services, utilities and certain raw materials, whereas previously Saudi producers have tended to do everything themselves, he explains.

“The fact that we are cracking naphtha allows us to diversify from both the economic and industrial point of view,” says Don Taylor, vice president for manufacturing and engineering. “We are moving to specialty chemicals, which is a new area of development [in the region]. This is attractive for our shareholders and enables us to support secondary and tertiary manufacturing in the area.”

Middle-class consumers are increasing in the region and there is growing demand for housing, cars, computers, personal hygiene and other products. These are the areas where Sadara’s products will find application in the GCC and Asian markets, which are growing faster than in the developed regions of the world.

The driving force behind the development has been state-owned Saudi Aramco’s desire to create more value for the country and to provide more jobs for Saudi Arabia’s growing population.

The huge complex – the biggest chemical site ever developed in a single phase – is expected to produce 3m tonnes/year of high value-added chemicals and performance plastics and also to deliver sales up to $6-8bn/year within a few years after operations commence.

The portfolio of products was developed once Dow was onboard as a partner and plays to its strengths in technology and operational experience, as well as the chemicals marketplace presence it has with its well-known brands and products.

In many instances the production units use Dow technology. All production facilities are tried and tested at the scale Sadara will be using, and there is no upscaling.

At the heart of the complex, explains Taylor, is the mixed feed cracker using Technip technology that can use full range naphtha. “Our mixed feed cracker is very flexible and can crack a range of feedstock from ethane to naphtha,” says Taylor.

Nameplate capacity is 1.5m tonnes/year ethylene, much of which is used to feed four polyethylene (PE) units. “The polyethylene trains use Dow’s proprietary solution PE technology, and allow us to make designer-type molecules for packaging, medical, transportation and electrical and electronic applications.”

The heavier-than-usual feed for the GCC region enables heavier byproducts to be produced, adds Taylor. There is 400,000 tonnes/year of propylene and enough pygas to produce 280,000 tonnes/year benzene and 134,000 tonnes/year toluene. These two aromatics will be augmented by purchased material to provide sufficient feed to downstream units.

“The benzene and toluene lead us into different value chains, specifically toluene di-isocyanate (TDI) and polymeric methylene diphenyl diisocyanate (MDI), which, with the polyols and polyether polyols we make from the propylene stream, can be used by customers to make polyurethanes.” This will be a key advancer for the GCC region when the units come on-stream late in 2016 or early 2017.

First Saudi Arabian production

“We will be the first to manufacture iso-cyanates and polyols in the Kingdom,” says Taylor, “and will open up a complete new value chain in the GCC region. There is significant growth potential in the Middle East and Far East, and we will benefit from the technical advances of Dow in the iso-cyanates area and also from the recognition of Dow as a top brand in these products, which we can leverage.”

Other key products in the portfolio, adds Taylor, and ones that are also new to the GCC marketplaces, include butyl glycol ethers – used in industrial cleaning, electronics and coatings – and propylene glycol, which finds applications in de-icing, heat transfer, pharmaceuticals, food and personal care uses.

These products are derived from ethylene oxide and propylene oxide, produced as intermediates, and either used internally or for pipeline delivery to customers in the adjacent chemical park.

“The challenge with Sadara is the 26 production units are all highly integrated and also very flexible on feedstock,” says Taylor. “We have to be very capable of managing the integration and the operation of the site, so we have a unique process control system in place. We are also integrated with other companies – there are 15 third party suppliers and pipelines into other Jubail facilities for streams such as ethylene, propylene, butanol and potentially hydrogen as well. We are bringing Jubail together.”

These partners mark an important change in the way petrochemical companies do business. Sadara has already engaged in two new joint ventures, for supply of butanol and hydrogen peroxide to the complex.

Butanol/Hydrogen Peroxide JVS

The butanol venture, Saudi Butanol Co (SaBuCo) will produce 330,000 tonne/year at the world’s largest butanol plant on a site owned by Tasnee in Jubail. The three partners in SaBuCo are Sadara, SABIC affiliate Saudi Kayan Petrochemical Company and Saudi Acrylic Acid Company (SAAC), which is itself owned by TSOC, an affiliate of Tasnee and Sahara Petrochemicals Company. The plant being built by SaBuCo will be operated by Tasnee and will supply Sadara with the butanol it needs to make its butyl glycol ethers.

For hydrogen peroxide, Sadara has formed a joint venture with Solvay called Saudi Hydrogen Peroxide Co, which will build Saudi Arabia’s first plant for the material. In this case the plant is being built within the Sadara complex in Jubail. With a capacity of 300,000 tonnes/year, it will be one of the largest hydrogen peroxide units in the world when it comes onstream. Sadara will use the output as a raw material in the production of propylene oxide.

But the collaboration does not end there. Sadara has arrangements in place for electricity supply, with the Saudi Electricity Company (SEC) and with Marafiq, the power and water utility company for Jubail and Yanbu, which will be responsible for the provision of potable water and industrial water as well as wastewater and sanitary water treatment.

“SEC will supply 750 MW of power to the Sadara complex while Linde will supply ammonia, carbon monoxide and hydrogen,” adds Taylor. “National Industrial Gas Company will supply oxygen and nitrogen.

“These are leading edge technologies and allow us to make designer-type molecules for packaging, medical, transportation and electrical and electronic applications” 

Don Taylor
Vice president manufacturing and engineering, Sadara
 

Construction on the complex began in 2011 shortly after the deal was signed between Saudi Aramco and Dow to create the joint venture. The first units are scheduled to swing into action in the fourth quarter of 2015. These will be the two solution PE units, followed by the mixed feed cracker scheduled for start-up very early in 2016.

The rest of the units will be phased in, with full operations expected in 2016, with the isocyanates to be brought onstream at the tail end. “We always like to push ourselves and really will be looking for completion by the end of 2016. But it’s all a matter of how the systems move forward,” says Taylor.

“The realisation of our plans really is a dream come true,” says Al-Labban. “Who would have believed five or six years ago that someone could build a $20bn chemical complex in one go on time and with the best in class safety performance?”

Besides building a worldscale chemical complex, Sadara has also been building up the company’s workforce. As it has started from scratch, the company has had the benefit of being able to create its own corporate culture.

“We have done this by developing a value system based around five key values: safety, teamwork, integrity, efficiency and effectiveness, and learning and growth. We have focused on these because we have a highly integrated facility to run and need very good communications between the production envelopes at the complex, and transparent openness and trust.”

Transparency and trust

The goal, he says, is to build a company that everyone wants to work for. “Our hope is that we will be seen as a fast-growing and successful company, providing challenges to our workforce and always looking for opportunities to expand, develop and create value for our shareholders. But we also want to be seen as a company that has good communication, transparency and trust – so that when someone who works for us says something, that something can be relied on.”

And in the future? The focus at the present is of course all about the execution of the start-ups and establishing stable operation of the complex. But in time it is expected that Sadara will look for opportunities to expand further into specialty chemicals and create more value for shareholders and make a greater contribution to the economy of Saudi Arabia.