Sabic, Aramco in Win-Win Situation with Refinery, Petrochem Complex Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--A proposed deal between Saudi Basic Industries Corporation (Sabic) and the state-owned oil company Saudi Aramco to upgrade the Yanbu refinery and construct a petrochemical complex at the same site is seen as a win-win proposition for both companies. Saudi Aramco would not need a foreign partner to develop Yanbu, and Sabic would have access to Saudi Aramco's oil feedstock for petrochemical projects.

Sabic is reported to be considering the planned Osos Petrochemicals Company's 60,000 ton-per-annum polybutylene terepthalate complex, which is also at Yanbu. The product would be supplied as an insulator to the electrical power and electronics industries. This $500 million complex would fit in with Sabic's strategy to boost its position in the specialty-chemicals market. Aramco launched expansion plans for Yanbu in 2005 with plans to upgrade the 235,000-barrel-per-day (bpd) refinery and a steam cracker and aromatics complex

Yanbu is one of Aramco's three refinery and petrochemical plants. The others are Rabigh, a joint venture with Japan's Sumitomo Chemical Company, and Ras Tanura, a joint venture with Dow Chemical. The Yanbu complex would be designed to produce products that did not compete with those from the other Aramco petrochem complexes. The Saudi government is backing the Yanbu venture, which would bring together the expertise of the world's leading chemical producer by value, Sabic, with the hydrocarbon feedstock of Aramco.

In February 2007, Foster Wheeler Energy (NYSE:FWLT), part of FWLT's Global Engineering and Construction Group, was awarded the front end engineering design and project management consultancy services contract by Osos Petrochemicals (Riyadh, Saudi Arabia) for the Yanbu petrochem complex. The complex covers four licensed technology process units plus associated utilities, offsites and common utilities.

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