Saudi ethylene and propylene capacities to reach 16.52 mln tpa and 6.55 mln tpa by 2015

As compared with 2010, Saudi Arabia’s total PE capacity will rise 20% to 8.86 mln tpa, PP capacity will rise 11%, and PS, PET and PVC capacities will remain unchanged, as per Business Monitor International's (BMI) Saudi Arabia Petrochemicals Report (Q4-2011). Ethylene capacity is expected to rise by more than 100% by 2015 as compared to 2008 levels, with the major contribution of petrochemicals developments in Jubail and Yanbu. BMI's projections for petrochemical capacity are based on planned projects, but it is possible that some projects may not come to completion followed by the lower ethane feedstock and a possible dull recovery in the Chinese market - at a time of rising Chinese capacities. Due to the integrated nature of the mega projects under development, any delay further up the supply chain will cause delays in downstream developments. Technical problems at Sahara Petrochemicals' Al-Waha plant and at Petro Rabigh have negatively affected PP output. Joint ventures are being established to build and operate units lined up with Saudi Arabia's National Industrial Clusters Development Program, which aims to develop and diversify its manufacturing sector and create opportunities in downstream industries such as construction, automotive, electronics, medical technologies and appliances. The projects with the potential to diversify and strengthen the country's economy and create jobs are given priority for feedstock allocation. Sabic also seeks to use its basic petrochemicals projects as raw material for processing. The recent decision by Dow Chemical and Saudi Aramco to go ahead with the integrated US$20 bln Sadara Chemical Company joint venture complex will significantly boost the falling growth of chemicals. Similar projects were announced in mid-2011, largely directed as capitalising on the growth in the Asian automotive industries, particularly tyres.
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