Saudi SABIC expects oil-to-chems complex to start up in 2020

DUBAI (ICIS)–Petrochemical giant Saudi Basic Industries Corp (SABIC) on Tuesday said its planned oil-to-chemicals complex in the kingdom is expected to start operations by 2020.

“SABIC has entered the final stages of its preliminary studies to assess construction works of the complex to be established in the kingdom of Saudi Arabia,” Sabic said in a statement to the Saudi stock exchange.

SABIC did not say where the complex would be located. However, industry officials said the largest company by market value in the Middle East is expected to build the 112.5bn Saudi riyal ($30bn) plant in the industrial city of Yanbu.

“The complex will provide a new competitive standard and put Saudi Arabia in a leading position technically at the level of the petrochemical industry,” the statement said.

SABIC expects consumption of around 10m tonnes of crude oil annually as feedstock for the production of petrochemicals and specialty chemicals. It is equivalent to 200,000bbl/day or an average-sized oil refinery. 

SABIC said development of the Saudi petrochemical sector is part of Riyadh’s strategy for diversifying the economy away from heavy dependence on crude export revenues.

“It is expected that the complex starts at the end of the year 2020 and will lead to around one hundred thousand new jobs,” it added.

Last month, Saudi Minister of Petroleum Ali Al-Naimi also indicated at a petrochemical conference held in Yanbu that the kingdom plans to establish the largest oil-to-chemicals complex in the region, and the ministry is studying an innovative technology in cooperation with SABIC to build an integrated industrial complex for producing petrochemicals from crude.

“Aramco has been researching ways to make ethylene and propylene directly from oil for years and … development of the Saudi petrochemical sector is part of Riyadh’s strategy for diversifying the economy away from heavy dependence on crude export revenues,” Al-Naimi told the conference.

ExxonMobil recently started up the world’s first plant that cracks crude oil into chemicals in Singapore.

($1 = SR3.75)