Saudi Aramco plans an expansion of role in the petrochem industry

10-Jun-05

Saudi Arabia will soon produce almost 10% of the world's basic petrochemicals and plans to expand its role even further. Currently, Saudi Arabia's products are sold in over 100 countries and annual sales in 2004 exceeded US$20 billion. The Kingdom's petrochemical industry has been focused more on ethylene and methanol than the Benzene chain of products. Saudi Arabia now plans to expand its liquid-based petrochemicals capacity. 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 Saudi Arabia 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. Since its inception 30 years ago, the MGS has expanded from feeding some 25 chemical plants in the '70s, to feeding an anticipated 500 facilities by 2010. Investments have grown from about a half-billion dollars in the '70s to US$20 billion in 2000, and expected to more than double to US$ 40 billion by the end of this decade. Saudi Aramco has allocated feedstock over the next 4-5 years to numerous projects, including 6 cracker complexes, 3 propane dehydrogenation projects, 2 butane-based projects, 3 methane-based projects and 1 natural gasoline (C5+) project.