Saudi Arabia as leading ethylene source

A new study of the market research institute, Ceresana Research, shows that ethylene producers are recovering from the sharp drop in 2009. By 2017, according to the study, worldwide ethylene revenue will reach again the current 2008 peak volume amounting to over $160 billion.

While the study indicates that the Asia- Pacific region will continue to dominate the market in the future to account for more than a third of worldwide demand, Middle East countries exhibit the largest increases in ethylene production and demand. Volumes in the Middle East have doubled over the past 8 years and Ceresana expects to see a further doubling by 2015.

More than a third of the sold ethylene is processed into polyethylene, which is used in the production of materials made of HDPE, or LDPE packaging. The production of ethylene oxide accounts for roughly 11% of global ethylene demand.

Raising future production

Production capacity for ethylene in the Middle East is projected to more than double in the next five years, according to estimates by the Gulf Petrochemicals and Chemicals Association (GPCA). Ethylene production is expected to rise from over 13 million metric tonnes in 2007 to over 29 million metric tonnes in 2012. This represents nearly half of global capacity growth, GPCA said.

"The world's largest programme ever for the construction of new ethylene plants is taking place in the Middle East," said Mr. Mohamed Al-Mady, chairman of GPCA  and CEO of Saudi Basic Industries Corp. (SABIC). Gulf-based producers were able to continue implementing strategic moves during the economic downturn and now that the world economic situation has improved, the Gulf petrochemical industry would emerge as one of the strongest production hubs in the global industry. Mr. Al-Mady also noted that total capital investment in petrochemicals in the region is expected to reach $50 billion by 2015.

Ethylene is the building block of the petrochemicals industry and is supplied from gas in the Middle East at great cost advantage. GPCA also predicts that the Middle East is set to become the epicentre of global petrochemicals manufacturing, essential materials for packaging, healthcare, pipes, electronics goods, personal care, construction, and many other industrial and consumer requirements.
A number of petrochemical plants in Saudi Arabia are expected to play an all-important role in ensuring supply. One of them involves the plan of Saudi Aramco (Dharan, Saudi Arabia) and Dow Chemicals to construct a petrochemical complex in Saudi Arabia. Originally planned for Ras Tanura, which is located about 400 km northwest of Riyadh, Saudi Aramco and Dow decided to move the project to Al-Jubail for financial reasons. The new site, about 30 km north of Ras Tanura, is far more developed because of the site's close proximity to Al Jubail Industrial City.

Dow and Saudi Aramco originally planned to have two naptha crackers to be designed by Technip (Paris, France) at the ethylene-based complex, but decision was arrived to construction only one cracker. Saudi Aramco and Dow already signed contracts with other engineering firms for the construction of the project. The complex is not scheduled to begin construction until June 2012, and will focus on an ethylene facility with capacity of 1.3 million metric tonnes of ethylene and 400,000 metric tonnes of propylene annually. The ethylene and propylene will serve as feedstock for multiple downstream lines. The largest of these include PE and PP production units, and an ethylene glycol line, as well as an aniline line and a purified terephthalic acid unit. When completed in 2015, the Al Jubail complex is expected to produce almost 8 million metric tonnes of petrochemicals annually.

 TASNEENike Hyperdunk 2018