Jul 02 2012
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SABIC And ExxonMobil Give Green Light To $3.4Bn Kemya Petchem Project
Saudi Basic Industries Corporation ( SABIC ) and ExxonMobil are to proceed with a specialty elastomers (synthetic rubber) project at their existing Kemya site in Jubail, they announced on 25 July. The $3.4bn project will be financed by the two shareholders and through third party debt. HSBC is their financial adviser, MEES understands. The project is scheduled for completion in 2015 with a total annual capacity of 400,000 tons/year of halobutyl rubber, styrene butadiene, polybutadiene, ethylene propylene diene monomer (EPDM), thermoplastic specialty polymers and carbon black to serve local markets in the Middle East and Asia. Expansion of transport infrastructure in the Middle East and Asia-Pacific region has created strong demand for rubber products.
The sponsors have awarded the engineering, procurement and construction (EPC) contracts to South Koreaï¿½s Daelim, Franceï¿½s Technip and Spainï¿½s Tecnicas Reunidas. The latter commented that elastomers and related products are needed to support an automobile industry project being undertaken in Jubail. SABICï¿½s Vice-Chairman and CEO Muhammad al-Mady said that the Kemya project demonstrates a ï¿½commitment to build and champion a first-rate rubber industry in Saudi Arabia that supports job creation, develops downstream industries and helps diversify the national economy.ï¿½
The Kemya deal comes at a watershed in Saudi petchems development. The kingdom wants to expand downstream to industrialize and create jobs, but is running up against a lack of ethane availability. Several new projects are under consideration, including, MEES understands, a potential petrochemical expansion to the 400,000 b/d Total/Aramco Satorp joint venture refinery will, if approved, mainly use refinery product feedstock. ï¿½They are looking at refined naphtha for new crackers, but the economics are just not as compelling as for ethane crackers like the majority of Saudi projects,ï¿½ one source tells MEES . ï¿½Ethane crackers really are a no-brainer as far as profitability is concerned,ï¿½ he adds.
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