PETROCHEMICALS

GLOBAL DEMAND FUELS NEW WAVE OF PETROCHEMICAL PROJECTS

In January, SABIC said it was collaborating with Oman’s OQ Group and Kuwait Petroleum International (KPI) on a project development agreement for a jointly owned petrochemical complex in the Special Economic Zone at Duqm (SEZAD) in Oman.

The partners plan to develop a petrochemical complex featuring steam cracker and derivatives units, and a natural gas liquid (NGL) extraction facility. The three companies will conduct studies and collaborate to develop the project to make it globally competitive and profitable.

The move comes as demand for petrochemicals is expected to rise amid growing global population and expansion in emerging economies. The project will tap natural gas liquids and other feedstocks from OQ and KPI’s joint venture refinery, OQ8 in Duqm, to manufacture petrochemical products targeting growing markets linked to energy transition, clean technologies, mobility, construction, durable goods, healthcare, and packaging.

“The project intends to deploy state-of-the-art technologies to minimise carbon footprint and incorporate circular economy aspects and commit to high environmental standards,” the companies said. “In addition, the project would also benefit from the excellent location of Duqm being close to markets and taking advantage of the infrastructure, which has been developed in the area, as OQ continues in its strategy to help develop SEZAD as a manufacturing and logistics hub in line with Vision 2040.”

Lowering carbon footprint is a main focus of Saudi petrochemical players. SABIC, in particular, recently reaffirmed its commitment to accelerate the circular carbon economy by unveiling a target of one million metric tonnes of its proprietary recyclable solutions, known as the Trucircle, by 2030. A cornerstone of SABIC’s green efforts include production from its first commercially advanced recycling unit in Geleen, The Netherlands, which is in the final stages of construction with commercial delivery of first circular polymers expected in 2023.

 

Aramco, which owns 70% of SABIC’s shares (with the remaining 30% publicly traded on the Saudi stock exchange), also made a number of landmark announcements recently.

Saudi Arabia’s major integrated energy and chemicals companies is teaming up with China Petroleum and Chemical Corporation and SABIC to explore refining and petrochemical projects in the kingdom and China. Aramco and Sinopec have already signed heads of agreement for a greenfield project in Gulei, Fujian Province, with plans to include a 320,000 barrels-per-day (bpd) refinery and a 1.5 million tonnes-per-year petrochemical cracker complex. It is expected to commence operations by the end of 2025.

In addition, a new memorandum of understanding between the trio aims to study the economic and technical feasibility of developing a new petrochemical complex to be integrated with an existing refinery in Yanbu, Saudi Arabia.

Aramco said the new project will support its role as a reliable energy supplier to China as it seeks to expand its liquids-to-chemicals capacity to up to 4 million bpd by 2030.

“The collaboration also aligns with Sinopec’s vision to become a world-leading energy and petrochemical corporation, providing quality products and reliable energy to benefit the lives of people worldwide,” Aramco said.

 

In December, Aramco and French energy company TotalEnergies took a final investment decision (FID) to build the Amiral complex, a major petrochemical facility in Saudi Arabia. The project will be owned, operated, and integrated with the existing SATORP refinery located in Jubail on the kingdom’s eastern coast. The investment decision is subject to customary closing conditions and approvals.

The USD 11 billion project will be partly funded through a USD 4 billion joint equity partnership by Aramco (62.5%) and TotalEnergies (37.5%). The project’s construction will begin in the first quarter of 2023, with commercial operation targeted by 2027.

“The petrochemical facility will enable SATORP to convert internally produced refinery off-gases and naphtha, as well as ethane and natural gasoline supplied by Aramco, into higher value chemicals, helping to advance Aramco’s liquids-to-chemicals strategy,” the companies said.

Capable of producing 1.65 million tonnes per annum of ethylene, Amiral will be the first in the region to be integrated with a refinery. It will also include two state-of-the-art polyethylene units using the advanced dual loop technology, a butadiene extraction unit, and other associated derivatives units.

The project will create 7,000 direct and indirect jobs, and eventually provide feedstock to other petrochemical and specialty chemical plants located in the Jubail industrial area. The project will also support the establishment of key manufacturing industries such as carbon fibres, lubes, drilling fluids, detergents, food additives, automotive parts, and tires.