Market and product
Saudi Aramco, Dow Shift Chemical Venture to Jubail
Aug. 3 (Bloomberg) -- Saudi Aramco, the world’s largest state-owned oil company, and partner Dow Chemical Co. will shift the location of a proposed chemical and plastics plant to Jubail on the Persian Gulf coast.
The partners expect to complete the engineering and design by mid-2011, the companies said today in a statement distributed by Business Wire. They moved it from a planned spot at Ras Tanura in Eastern Province, Saudi Arabia.
Producers such as Saudi Arabia are expanding petrochemicals output to gain more value from oil resources. The region’s share of the global chemicals market will equal that of the U.S. and Europe by 2015, Abdulwahab Al-Sadoun, secretary general of the Gulf Petrochemical and Chemicals Association, said in June.
“We continue to execute the project,” Saudi Aramco Vice President Abdulaziz Al-Judaimi said in the statement. “The commitment of both partners demonstrates the strategic importance of this project.”
Jubail, an existing industrial city that includes oil refining sites, may provide infrastructure benefits and opportunities for integration, Dow and Aramco said. Total SA, said in April it discussed expanding an integrated refinery and chemical project it’s building at Jubail with Aramco.
“The project team will continue to evaluate all variables that could impact the ultimate investment decision and the relevant stakeholders,” Jim McIlvenny, a senior vice president at Midland, Michigan-based Dow, said in the statement.
The project is delayed, according to a schedule from last year. Front-end engineering was set to be completed by the second quarter after which cost estimates would be examined before final approval in October 2010, Al-Judaimi said at a conference in Houston in March 2009. Production was slated to begin in 2015.
The companies didn’t give a planned start date for the project today.
The venture, announced in 2006, was planned to produce 1.8 million tons a year of ethylene from naphtha and ethane feedstock, Al-Judaimi said last year. The site would also make chlorine, polyvinyl chloride and other products.
(Source: Bloomberg, By Anthony DiPaol, With assistance from Ayesha Daya in Dubai and Jack Kaskey in New York. Editors: Jonas Bergman, Rob Verdonck)
