Despite a significant fall in oil prices since July 2014, Saudi Arabia’s joint venture partnership with Dow Chemical to build a $20 billion chemicals plant is going forward with an estimated completion date at full output of 2017, according to a report in Bloomberg based on comments made by a company official in Dubai.
The ambitious project, like most chemical projects in the Middle East, faces tough headwinds after oil prices fell nearly 50% last year, according to Bloomberg:
Sadara, located in Jubail, Saudi Arabia.
“Middle Eastern petrochemical plants, which use natural gas, are becoming less competitive than plants that use oil after crude prices declined, Sharma said. Chemical prices are also falling because of lower oil prices, he said. Sadara will be the first plant in the Middle East to use naphtha, a refined oil product, [Khalid] Al Hamid said.”
Established in October 2011, Sadara Chemical Company is a joint venture developed by the Saudi Arabian Oil Company (Saudi Aramco) and The Dow Chemical Company (Dow), and is the “largest chemical complex ever built in the world in a single phase, with 26 integrated world-scale manufacturing plants, over 3 million metric tons of capacity per year, and a total investment of about US$20 billion,” according to the company’s website.
Sadara’s offerings
The Jubail, Saudi Arabia-based plant will be the first chemical complex to crack naphtha in the countries of the Gulf Cooperation Council (GCC). “This advance will open the door to new specialty chemical plants and businesses in the Kingdom and take the Saudi chemical industry far beyond its existing commodity products. Cracking naphtha will make it possible to produce new intermediate products, which in turn will open up a whole new range of additional downstream opportunities,” the company said on its website.
