Saudi Aramco and Saudi Basic Industries Corp (SABIC) have launched bidding for engineering work on their joint crude oil to chemicals project, industry sources said, a key step towards developing the $20-billion-plus complex.
The project, known as COTC, the first major scheme to bring the two giants together, is expected to process Arabian Light and Extra Light crude oil, one of the sources told Reuters.
Several plants are expected to be built including a 400,000-barrels-per-day integrated crude distillation and vacuum unit, a distillate hydrotreater, a vacuum gas oil hydrocracker, a residual fluid catalytic cracking unit, a mixed feed cracker, as well as polyethylene, polypropylene, butadiene and aromatics recovery units.
Aramco and SABIC are still considering where to locate the chemicals site; at Yanbu, near a power plant; or in Jubail, close to Sadara, which is an Aramco joint venture with U.S. company Dow Chemical.
The closing date for bids for pre-front end engineering and design work (pre-FEED) and FEED for the COTC is Sept. 25, one of the sources said, adding that the plant is expected to be commissioned by the end of 2024.
Another source said pre-FEED is expected to be completed by late 2018, with FEED to be finalised by late 2019. Aramco and SABIC are expected to launch bidding for construction by mid-2020.
SABIC did not immediately respond to a Reuters request for comment. Aramco said it “declines to comment on rumor or speculation”.
Aramco’s chief executive has said it was a priority for the company to convert crude oil to chemicals as the state oil producer aims to diversify operations in the run-up to an initial public offering of shares next year.
Downstream, which covers refining and chemicals, will help Aramco boost value from hydrocarbons by securing revenue streams and become less vulnerable to oil price swings.
LESS GAS
Analysts say the project will help reduce natural gas usage in petrochemicals at a time when the kingdom is trying to use more gas to generate power, rather than burning crude oil, as it seeks to diversify its energy mix.
“What is new and different is that the prices of crude and gasoline/diesel have come down more than petrochemicals. This makes the incentive to produce petrochemicals greater than to make gasoline and diesel,” Mark Routt, chief economist for the Americas at KBC Advanced Technologies, said.
“It certainly could usher in a new ’wave’ of investments in producing those petrochemicals,” he said.
The project is strategic for Saudi Arabia, which plans to expand further into the petrochemical chain to export more end products and grow beyond oil.
It is also crucial for Saudi Arabia’s economic reform plan and could create as many as 100,000 jobs.
SABIC’s CEO told Reuters in May that COTC could produce more than 18 million tonnes of materials yearly.
By Reem Shamseddine
Source: Reuters
We are closing the chapter of the Chemicals Import Export Headquarters, and opening a new chapter under the name of Qemetica – a chemical group driving many industries on all continents. Therefore, the change of name is also accompanied by the adoption of the key goals of the business strategy for the next 6 years. – says Kamil Majczak, President of the Management Board.
In its efforts to advance chemical recycling, Neste has successfully conducted its first processing trial run with a new challenging raw material, liquefied discarded tires. In the processing run, Neste produced high-quality raw material for new plastics and chemicals.
Sika is opening a state-of-the-art facility in Lima, Peru, to produce synthetic macro fibers, and expanding the rollout of a product range with great growth potential in Latin America. With this innovative technology, Sika is further strengthening its position as a leading supplier to the mining industry and a strong partner for infrastructure projects.
