With a total production capacity of 6.6 million tons, Saudi Jubail welcomes two more world-class petrochemical cracking projects

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Two more world-class petrochemical cracking projects to be established in Saudi Jubail, with a total capacity of 6.6 million tons – 2025-03-05. In February, the Saudi Ministry of Energy approved the supply plans for raw materials needed for two world-class steam cracking and derivative production projects located in Jubail, Saudi Arabia; these projects have a potential annual capacity of 6.6 million tons. Subsequently, the relevant project plan was officially released. One of the planned petrochemical complexes is to be developed by Tasnee National Industrialization Co. (based in Riyadh), with an annual production capacity of 3.3 million tons of petrochemical products. On February 26, Tasni said its goal is to begin operating the new integrated facility in the fourth quarter of 2030. Tasni Company stated that on February 26 it received approval from the Saudi Ministry of Energy to obtain certain quantities of ethane, propane, and butane as raw materials for constructing an industrial complex in Jubail that will include a thermal cracking unit for producing ethylene at a world-class scale. The company said that the planned products of this integrated facility will include ethylene, high-density polyethylene (HDPE), linear low-density polyethylene (LLDPE), and methyl tert-butyl ether (MTBE). Other products manufactured in this region for the first time include phthalate-free plasticizers, new polyether polyols, as well as ethylene oxide and propylene oxide copolymers used in specific applications and specialty products; these products \"will help increase the added value of Saudi Arabia’s petrochemical industry.\" Another integrated project was announced on February 27 by Sahara International Petrochemical Co. (abbreviated as Sipchem, located in Khubar) and Lyondell Basel Industries NV. The two companies will form a joint venture to develop a comprehensive facility with a capacity of 1.5 million tons per year of ethylene and 1.8 million tons per year of derivatives, including basic and specialty polymers. At present, the project has not announced an estimated start date. Sipchem and LyondellBasell issued statements on February 27, stating that on February 26 they had received approval from the Saudi Ministry of Energy regarding the quantities of raw materials required for the joint petrochemical complex they plan to build in Jubail. Both parties stated that Sipchem will hold 60% of the shares in the joint venture, while LyondellBasell will hold the remaining 40%. In a statement to the Saudi Stock Exchange, Sipchem said that the complex has an annual production capacity of 1.5 million tons of ethylene and 1.8 million tons of derivatives, including basic polymers and specialty polymers. This petrochemical producer listed in Saudi Arabia plans to develop the complex in phases in order to maximize added value in the medium to long term. Previously, Saudi Aramco raised the prices of its raw materials on January 1 for the second consecutive year. Companies such as Sipchem and Tasni subsequently warned that this would lead to rising production costs. Multiple client companies expect sales costs to increase by between 1% and 3.7%. Sipchem said in response to the price increase that it expects its sales costs to rise by about 2% starting from the first quarter ； Tasni estimates that the annual sales costs of its subsidiaries and joint ventures will increase by 1.85% starting from the first quarter. Raw materials such as ethane and propane constitute the main operating costs for Saudi chemical producers. Saudi Aramco’s last increase in raw material prices in January 2024 marked the first time it had raised prices for chemical manufacturers since January 2016. As part of Saudi Arabia’s \"Vision 2030,\" the state-owned company Saudi Aramco is expanding its production of petrochemical products, primarily through its chemical subsidiary SABIC as well as other joint ventures both within and outside the country. This is both part of a broader expansion into downstream businesses and aims to create a stable end market for its future crude oil reserves. It is expected that in the coming decades, as demand for transportation fuels is set to decline, petrochemical products will become the main driver of growth in crude oil demand.