Need for Saudi Arabia to find competitive new feedstocks to offset a gas shortage

04-Jul-11

For Saudi Arabia to expand its petrochemical industry, there is a need to find competitive new feedstocks to offset a gas shortage. The Kingdom’s natural gas consumption has risen sharply because of growing demand from power generation as well as the petrochemical sector, as per Reuters. Since ethane is not available, these majors will have to change over to liquid feedstock. Petrochem majors in the Gulf have relied heavily on ethane, a form of natural gas. This region has 40% of the world's known gas reserves, only Qatar has avoided burning away much of its supplies to become a net exporter. Saudi Arabia is a net exporter of naphtha. Saudi Aramco plans to use natural gas liquids and refined products for its flagship project to expand the Rabigh II joint venture with Sumitomo Chemical, partly because of uncertainty over the supply of natural gas over the plant's lifetime." The mixed-feed cracker that Saudi Aramco and Dow Chemical plan to build will also crack naphtha as the kingdom looks for alternatives to limited gas supplies. But cracking liquid hydrocarbons, especially naphtha, is not nearly as cost competitive as cracking ethane.