Evaluation of Feedstocks Slows Saudi Arabian CPI Growth

---

Researched by Industrialinfo Resources (Sugar Land, Texas)--At first glance, one might think the slowdown and revamping of projects in the Middle East, particularly Saudi Arabia, was simply another ripple in the global financial crisis. But, for the most part, this is not true. The slowdown has been caused primarily by issues related to the availability and allocation of feedstock.

The Minster of Petroleum for the Kingdom of Saudi Arabia has decreed that all projects using light hydrocarbons as a feedstock in the Yanbu'al Bahr area must top planning and/or engineering activities and be placed on hold. The ministry will spend at least the rest of this year determining the amount of feedstock and fuel that will be needed to operate these plants.

This enactment has affected more than 40 companies that were in planning and engineering phases. One of these companies is Arabian Industry Fibers Company (Yanbu'al Bahr, Saudi Arabia), which was planning to construct a 650,000-metric-ton-per-year propane dehydrogenation unit and a 525,000-metric-ton-per-year polypropylene unit.

CB&I Lummus Global Incorporated (Bloomfield, New Jersey), a subsidiary of Chicago Bridge & Iron Company NV (NYSE:CBI) (Amsterdam, Netherlands), completed work on the basic engineering for the propylene unit using proprietary process technology. The company planned to bid on the detailed engineering package when the minister applied his decision to halt all projects affected by the evaluation.

LyondellBasell Industries NV (Rotterdam, Netherlands) served as the engineer for the basic engineering package for the polypropylene unit. The company's Spheripol technology was to be used for the processing of the polypropylene.

Saudi Arabia has made a commitment to diversify the country's chemical production and is currently investigating the effectiveness of increasing production of products such as cumene, phenol and acrylonitrile. At the moment, the Saudi Arabian consensus is that light hydrocarbons are limited and will not support the planned consumption of the feedstock. Until evaluations are complete and direction is given, it seems that the projects planned for Yanbu'al Bahr will just have to wait.

View Project Report - 97000350 97000351

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.