New Saudi petrochemical plant to begin production this year

Saudi Arabian Oil Co. and Dow Chemical Co. are planning to begin production at their new US$20 billion petrochemical plant, Sadara Chemical Co., this year. According to Khalid Al Hamid, Manager for Engineering and Technology, ethylene and polyethylene will be the first products produced at the plant. Full output is scheduled for late 2017.

Other similar projects being planned in the region are facing the obstacle of falling crude prices. Saudi Arabia started the petrochemical project in 2011, when oil averaged approximately US$111 a barrel. Since then, prices have fallen by around 45%. Last month, Qatar Petroleum and Royal Dutch Shell Plc terminated their plans to construct a US$6.5 billion petrochemical plant as a result of the current energy environment.

“Middle East chemicals projects are facing stiff review,” Sanjay Sharma, Vice President for Middle East and India at IHS Inc., told local press in an interview in Dubai. “Industry does not need to react to the short-term swing and needs to look long-term for projects as the market will return.”

Edited from various sources by Rosalie Starling

Sources: Resource Investor, The Daily Star, Fuel Fix

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