PETROCHEMICALS

SABIC PURSUES SUSTAINABLE PETROCHEMICALS WITH NEW DEALS

Saudi Arabia Basic Industries Corp. (SABIC) is deepening and expanding its petrochemical product portfolio in the midst of a global energy transition.

In March, SABIC, which is 70% owned by Saudi Aramco, signed a deal with Germany’s BASF SE and UK’s Linde Plc to develop and demonstrate solutions for electrically heated steam cracker furnaces.

“The partners have already jointly worked on concepts to use renewable electricity instead of the fossil fuel gas typically used for the heating process,” SABIC said in a statement. “With this innovative approach focusing on one of the petrochemical industries’ core processes, the parties strive to offer a promising solution to significantly contribute to the reduction of CO2 emissions within the chemical industry.”

By using electricity from renewable sources, the new technology can reduce CO2 emissions by as much as 90%.

SABIC is making concerted efforts to reduce its carbon footprint as part of the kingdom’s goal to create a sustainable energy sector. The move also aligns with the kingdom’s wider efforts to conserve energy sources, boost energy efficiency and create a sustainable economy.

In March, the Saudi government announced the Saudi Green Initiative and the Middle East Green Initiative to combat climate change. Through these schemes, the government plans to reduce carbon emissions from hydrocarbon production by more than 60%, and achieve a reduction in carbon emissions by more than 10% of global contributions.

The kingdom’s energy companies, such as SABIC, are playing a critical role in the government’s efforts to curb emission and gain energy efficiency.

CIRCULAR ECONOMY

In April, SABIC signed a memorandum of understanding (MoU) with Saudi Investment Recycling Company (SIRC), a unit of Saudi Public Investment Fund (PIF), to help SIRC set up its first chemical recycling project to enable the use of recycled plastic feedstock.

The two companies also proposed a feasibility study to build a chemical recycling plant in the country to convert mixed plastic waste into pyrolysis oil, also known as synthetic fuel.

“The initiative will play a vital role in contributing to the Circular Economy of Saudi Arabia, reducing the greenhouse emissions, protecting the environment and creating a sustainable future in Saudi Arabia,” the company said in a statement. “We see the right synergy and expertise between SIRC and SABIC to make this massive project a resounding success and a role model initiative in the Middle East,” said Ziyad Al Shiha, chief executive officer of SIRC.

The news comes on the heels of another major SABIC deal with global oil company BP Plc. to recycle chemical products at the Gelsenkirchen chemical complex in Germany. The deal will increase the use of recycled plastics for feedstock, reducing the amount of fossil resources needed at the site.

“Advanced recycling allows us to increase the production of more sustainable materials and use our planet’s resources wisely, whilst reducing the use of conventional approaches such as landfill and combustion. Advanced recycling has a crucial role to play in the current recycling mix as it can capture value from plastic waste streams that have traditionally been ignored or discarded,” said Fahad Al Swailem, vice president, PE & Sales at SABIC. “We continue to increase our collaborations with upstream suppliers and downstream customers, and this new initiative with our long-term partner BP takes us one step further to achieving our vision.”

The company said the circular polymers are part of SABIC’s Trucircle portfolio, which encompasses mechanically recycled products, certified circular products from feedstock recycling of used plastic, certified renewable products from bio-based feedstock and closed loop initiatives to recycle plastic back into high quality applications.

            

These series of developments are part of Aramco’s wider strategy to reduce its carbon emissions, develop a climate-friendly circular domestic economy, and provide sustainable energy supplies for generations to come, even as it boosts its downstream and upstream production.

The company’s gross refining capacity stands at 6.4 million barrels per day (bpd), with net chemicals production capacity of 53.1 million bpd in 2020, according to Aramco’s latest report.

“Aramco believes that the acquisition facilitates the application of SABIC’s expertise in the chemicals industry to Aramco’s existing and future integrated downstream facilities,” the company said in its annual report published in March. “Aramco’s investment in SABIC makes it a major global producer of petrochemicals and expands its capabilities in procurement, manufacturing, marketing and sales.”

The streamlining of Aramco’s vast chemicals business is being further honed. SABIC said it is marketing Aramco’s allocation of Sadara Chemical Company (Sadara) products. Sadara is a joint venture with Dow Chemical Co.

“By marketing Aramco’s allocation of Sadara products, SABIC expects to drive further supply chain efficiencies, strengthen its brand and combined product and services offering, and help to maintain competitive preference in the global chemicals industry,” SABIC noted.