Saudi Arabia mulls altering supply routes for polymer sales to Africa on mounting security tensions in the Gulf

26-Jun-19

Saudi Arabian petrochemical producers are considering altering supply routes for some polymer sales to Africa because of worsening security conditions in the Mideast Gulf- following last week's incidents involving two tankers in the Gulf of Oman, as per Argus Media.com.
Petrochemical cargoes from Jubail typically pass through the Gulf of Oman on route to Asia-Pacific, Africa and Europe. Polymer producers with facilities in Jubail include Sabic and its many affiliate companies, Tasnee, Sipchem and Advanced Petrochemical, and the Saudi Chevron and Sadara joint ventures.

But the heightened threat to shipping in the region has led Jubail-based polymer producers to consider instead transporting cargoes 1,400km across the country by road to the Red Sea port of Jeddah, before shipping them across the Red Sea to Africa. It takes around one day to move polymers by truck from Jubail to Jeddah, and then a few more days to ship cargoes to east Africa. Petrochemical companies are typically unwilling to use the route, given the negative impact of heavy vehicles on Saudi roads. But the route would be quicker than shipping from Jubail to Africa, which requires more trans shipments. Polymer trucking costs from Jubail to Jeddah are estimated at US$30/ton at least. Additional freight costs between Jeddah and east Africa, need to be factored in- which can vary significantly from US$40-70/ton, depending on vessel availability.