According to oil and gas news website on May 18, Saudi Aramco and Saudi Basic Industries Corporation (Sabic) are moving forward with plans to build a large petrochemical complex in Yanbu, demonstrating their commitment to the long-term goal of expanding Saudi Arabia’s downstream sector.
The project planning undertaken by Saudi Aramco and SABIC also reflects their attention to the cost-intensive nature of building crude oil to chemicals (COTC) projects.
GlobalData Energy and Technology Editor Indrajit Sen commented: “The downstream project planned by Saudi Aramco/SABIC in Yanbu is hailed as the first such petrochemical project in the Middle East and one of the few in the world. One of many such projects. It is estimated that the cost of building such a complex is as high as $25 billion, and for Aramco, it is paying $69.1 billion to the Public Investment Fund (PIF) for the acquisition of Saudi Basic Industries Corp. (Sabic’s majority stake in Sabic) would justify this level of capital expenditure, but it may not be practical.”
“The changing outlook for demand for petrochemicals is also considered a concern for project operators. Factors, it is reported that Aramco/Saudi Basic Industries is considering reducing the planned production capacity of 9 million tons per year of petrochemical products. However, this project is by no means shelved, and the operator has never officially shelved it at any time.
Sticking to the original plan to build a large-scale COTC complex remains an option for the partners, Aramco/Saudi Basic Industries is considering alternative, cost-effective ways to build an integrated refining and petrochemicals project in Yanbu, even in Wood Group is acting as a consultant.
Indrajit Sen said: “Part of this alternative plan is to build a greenfield petrochemical plant in Yanbu close to the Yasref refinery to gain feedstock advantages. Most integrated refining and petrochemical projects currently under development in the GCC are estimated to cost less than $10 billion. It may take some time for Aramco/Saudi Basic Industries to configure the best options for large-scale projects, but their commitment to establishing downstream facilities in Yanbu remains valid. ”</p