MANAMA, 9 June 2005 — Saudi Aramco’s marketing consultant in Domestic Marketing Department Salem R. Al-Subayee addressed the Gulf Petrochemicals 2005 Conference here on Monday, discussing the past, present and future of the Saudi petrochemicals industry from Saudi Aramco’s perspective as a feedstock supplier. Al-Subayee began by noting that Saudi Arabia soon will produce almost 10 percent of the world’s basic petrochemicals and plans to expand its role even further.
Al-Subayee pointed out that Saudi Arabia’s petrochemical industry is made possible by the Kingdom’s Master Gas System (MGS), which is built and operated by Saudi Aramco. This massive system extends from the oil and gas-producing region in the eastern half of the Kingdom to the east and west coasts and includes an extensive pipeline network and huge gas-processing facilities. The ethane from the MGS is used domestically, primarily as petrochemical feedstock, while the recovered natural gas liquids (NGLs) are exported and used domestically.
Al-Subayee said that since its inception 30 years ago, the MGS has expanded dramatically; having fed some 25 chemical plants in the ‘70s, it will feed an anticipated 500 facilities by 2010.
Investment levels have followed the same trend, growing from about a half-billion dollars of investment in the ‘70s to $20 billion in 2000. By the end of this decade, the figure is expected to more than double the 2000 figure. “Saudi Arabia’s products are sold in more than 100 countries and exceeded $20 billion in annual sales in 2004,” Al-Subayee added.
Al-Subayee gave a list of forthcoming petrochemical projects in the Kingdom to which Saudi Aramco has allocated feedstock over the next four to five years. These include six cracker complexes, three propane dehydrogenation projects, two butane-based projects, three methane-based projects and a natural gasoline (C5+) project. “There are several other projects which are being reviewed for future feedstock allocations and have on-stream schedules for the 2010-2011 time-frame,” he added.
Al-Subayee also discussed what he termed Saudi Aramco’s “new direction.” The Kingdom’s petrochemical industry has been focused more on ethylene and methanol than the Benzene chain of products and was moving toward expanding its liquid-based petrochemicals capacity. “This direction includes refining and petrochemical integration with ethane/naphtha mixed cracking,” he said.
The director of Saudi Aramco’s Rabigh Industrial Development Department, Khalid M. Alagil, also addressed the conference, discussing the project’s background and development plans. Alagil began his presentation by noting that the Rabigh project — a joint effort between Saudi Aramco and Sumitomo Chemical of Japan — will transform the existing Rabigh topping refinery to a major integrated high-conversion refinery and petrochemical complex. The ultimate goal of the project is to have a profitable facility and provide investment opportunities for local and foreign investors in major process, conversion and support industries that contribute to stimulating the economy.
Some of the factors that make the Rabigh site so conducive to this development, Alagil said are the existing infrastructure at the development site and the economies of scale. The 400,000 barrel-per-day upgraded refinery and the 2.2 million ton-per-year olefins petrochemical complex will create a strong platform for other downstream industries and attract investment.
