Saudi Butanol gears up for Jubail plant trial operations

Updated 25 June 2015
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Saudi Butanol gears up for Jubail plant trial operations

JUBAIL: Saudi Butanol Company (SaBuCo) is preparing to start trial operations at its largest butanol plant in Jubail in the third quarter of this year.
Planned to be carried out for around six months, the trial operations will test equipment and production efficiency through technical licensing and contracts.
SaBuCo is a joint venture of Saudi Kayan Petrochemical Company, Sadara Chemical Company — a joint venture between Saudi Aramco and Dow Chemical Company — and Saudi Acrylic Acid Company (SAAC), an affiliate of Tasnee and Sahara Petrochemicals.
The new plant is expected to produce 330,000 tons of n-butanol and 11,000 tons of iso-butanol on a yearly basis, with an estimated investment of SR1.93 billion.
This joint venture of local petrochemicals aims to create added economic value through the efficient use of natural resources in the Kingdom to provide a new product based mainly on the support and development of local manufacturing industries.
The three partners in the joint venture will have equal stake in production quantities for use in manufacturing industries or for sales in local and overseas markets.
The butanol project will strongly support the coatings industry in the Kingdom. Potential investors can use the n-butanol and its derivates to introduce a wide range of coating products for the local, regional and global markets.
Located at Tasnee's petrochemical complex in Jubail, the butanol plant will enhance global competitive advantages for the national petrochemical industry, and Tasnee's integrated acrylates complex which is the first of its kind in the region.
SAAC is the biggest beneficiary of butanol project and its production capacity of acrylic acid is estimated at 160 thousand tons per year.
Moreover, SAAC production capacity of acrylic acid contributed to raise the Middle East share by nearly 6 percent amid growing global consumption per year and fierce competition from global producers, particularly Chinese producers that have registered significant increases in the production capacities reached 700 thousand tons in 2007 and 2 million tons in 2014.
The Middle East acquires 2 percent of the total global energy amounting to 5.1 million tons in 2013. China and North America hold half of the global production with 25 percent each, Western Europe 22 percent, Eastern Europe 1 percent, South and Southeast Asia 6 percent and North Asia 19 percent.


Saudi Arabia real estate reform ‘on the right track,’ housing minister tells conference

Updated 47 min 37 sec ago
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Saudi Arabia real estate reform ‘on the right track,’ housing minister tells conference

  • Financial Sector Conference is designed to showcase Saudi Arabia’s finance industry to a world audience
  • The most eye-catching was a plan by the Saudi Real Estate Refinance Company (SRC)

RIYADH: Saudi Arabia’s real estate finance sector — crucial to the ambition of a home-owning economy under the Vision 2030 strategy — is maturing rapidly, a high-profile event in Riyadh heard on Wednesday.
“We’re on the right track,” housing minister Majid Al-Hogail told attendees on the first day of the Financial Sector Conference, designed to showcase Saudi Arabia’s finance industry to a world audience.
His comments came as financial institutions in the Kingdom announced a raft of measures to encourage more home ownership.
The most eye-catching was a plan by the Saudi Real Estate Refinance Company (SRC) — owned by the Public Investment Fund — to issue up to SR3.75 billion ($1 billion) worth of sukuk, or Islamic bonds, this year to finance home ownership plans.
Fabrice Susini, chief executive of the company, said SRC had spent SR1.2 billion buying mortgages from local mortgage finance companies and adding liquidity to these firms. SRC is often compared to US home finance group Fannie Mae.
Reform of the financial infrastructure of the property market is regarded as crucial to Saudi Arabia’s Vision 2030 reform plans, to ensure an ownership rate of 70 percent in the privately owned housing market by 2030.
In a panel entitled “Mortgages: Bolstering Industry Appetite,” Al-Hogail spoke of the unique position Saudi Arabia has in the housing market, highlighting the relevance of a database established by the Ministry of Housing to give a better and deeper understanding of the market. The diverse nature of the market presents its own challenges, he said.
“Every city has its own different set of challenges and we can’t generalize. With the establishment of the database, it provides the ministry with a better future outlook through more detailed information, obtained through various means — whether it were through the Electric Company, through the Ministry of Municipal and Rural Affairs, or through the General Authority for Statistics and their surveys.”
“Over 16 government agencies support the housing sector to achieve Saudi Vision objectives, to increase property ownership among Saudis to 70 percent by 2030,” he said.
An official report for the first quarter of 2019 revealed that the finance market reached SR5.6 billion last March. Some 12,800 citizens received loans, and 85 percent were subsidised.
Saudi Arabia last year announced plans to boost the size of the mortgage market to SR502 billion by 2020 as part of a comprehensive plan to provide housing finance to its citizens, facilitating a balanced and sustainable housing environment through the establishment and development programs.
In other deals, Bidaya Home Finance announced three initiatives to enhance the Saudi market. Its first initiative involved the sale of Bidaya’s mortgage portfolio to SRC, valued at SR500 million over a period of six months. SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview. “Our strategy is clearly to tap the market twice this year,” he said.
“We are really looking at probably issuing something between SR2 to 4 billion that we may be issuing in two tranches.”
He said SRC was looking at sukuk in the 10- to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said. He added that the company was assessing whether it could also issue bonds in currencies other than the Saudi riyal.
In March, SRC completed a SR750 million sukuk issue with multiple tenors, under a program that allows it to issue up to SR11 billion of local currency denominated Islamic bonds.