Sabic affiliate Sharq in Jubail

Sabic affiliate Sharq in Jubail

Cities continue to flourish

Jubail and Yanbu are playing a critical role in Saudi industrial development but their impact is being felt globally, particularly in petrochemicals

December 2015

Recent significant developments in the Saudi cities of Jubail and Yanbu, operated under a Royal Commission charter, solidify their role as a premier channel of the kingdom’s economic and industrial development.

Projects of the Sadara petrochemical complex in Jubail, a $20 billion joint initiative between Saudi Aramco and The Dow Chemical Company, are nearly complete and will begin supplying to global markets including China where there is a particular appetite for plastic products which Sadara will help satisfy.

Several vital projects have also been completed in Yanbu making it a premier refining hub.

The cities’ combined output of petrochemical and refining products, among other items, feed the needs of local industries, leaving large volumes for export. They are responsible for more than 71 per cent of total Saudi exports, while the non-oil  exports of the commission cities  amount to 85 per cent of  all kingdom exports in that category.

It is estimated that the Royal Commission accounts for 65 per cent of industrial investment in the entire Gulf region and has a 20.2 per cent average annual growth rate in terms of foreign direct investment (FDI),

The two cities are also home to some 630 manufacturing enterprises and the kingdom has benefited from the transfer of technology.

The commission also contributes around 12 per cent to the kingdom’s GDP and to 65 per cent of the domestic industrial output.

In the run up to the completion of the Sadara complex, Sadara signed agreements with E A Juffali & Brothers this year to supply Butyl Tri-Glycol ether (BTG) and methylene diphenyl diisocyanate (MDI).

The chemicals will be required for units in the Juffali chemicals production complex in PlasChem Park in Jubail Industrial City II. The new Juffali complex will consist of several manufacturing plants designed to produce highly differentiated chemicals and products slated for use in Saudi Arabia’s various industries.

The PlasChem Park is adjacent to the Sadara Chemical Complex and covers a 12 sq km area.  It is a unique industrial platform and a collaborative effort between the Royal Commission and Sadara and is positioned for the development of new value-added downstream manufacturing and business opportunities.

The Juffali BTG project will encompass several speciality chemical products and includes production of about 5,000 tonnes per year of different grades of premium brake fluids, making it the first brake fluid production unit in the Mena region.

Sadara has announced it will sell some tank storage facilities to Jubail Chemical and Storage Services Co (JCSSC) at a cost of around SR1.76 billion ($470 million).

JCSSC, owned by Sabic and Vopak, will provide bulk storage and product handling services to Sadara for 20 years at the King Fahd Industrial Port in Jubail where it has a storage and shipping terminal.

A ramping up of projects in Jubail Industrial City has led to investments there reaching SR560 billion, according to Abdulaziz Attragi, general manager of strategic planning for the Royal Commission for Jubail.

He made the remark during the Royal Commission’s participation in a Saudi-Japanese forum.  Japan was said to account for SR34 billion of investments in Jubail’s petrochemical industry.



Air Liquide’s new plant in Yanbu

Air Liquide’s new plant in Yanbu

Yanbu Industrial City has big plans after achieving investments of some $40 billion in petrochemicals, refining and desalination, said Alaa Nassif, chief executive of the Royal Commission of Yanbu. The city is expected to see a further $21 billion of spending on new hydrocarbons downstream projects and a minerals hub by 2020. A special trade zone which will facilitate major shipping lines is among the considerations.

State oil giant Saudi Aramco is considering building a $20 billion refining and petrochemical complex at Yanbu on the Red Sea coast. The new refinery will have capacity of 400,000 barrels per day and stand next to an existing refinery at Yanbu, wholly owned by Aramco, which has a capacity of 240,000 bpd and would also feed a planned petrochemical complex.

The city’s new refinery Yasref, a joint venture between Saudi Aramco and Sinopec, is the region’s largest at 400,000 barrels of heavy crude oil per day. Meanwhile, an expansion at the Yanbu refinery of Saudi Aramco Lubricating Oil Refining Company (Luberef) has been completed.

France-based Air Liquide sees greater business opportunities in the wake of the recent start-up of its plant in Yanbu Industrial City which will supply hydrogen to the new Yasref refinery. The Air Liquide site has a total hydrogen capacity of 340,000 Nm3/hour. With the presence of refining and petrochemical industries in Yanbu, Air Liquide has the potential to further develop and optimise its hydrogen supply there.

Yanbu Industrial is keen that US corporations consider investing in the enclave.  At a programme in Ohio, USA, organised by the US-Saudi Arabian Business Council (USSABC), Yanbu officials held discussion with US firms that came within the target industries that Yanbu would like to support and see grow. The target sectors include downstream petrochemicals and plastics, consumer goods, rubber, renewable energy, automotive parts, multi-modal logistics and spare parts for oil and gas, petrochemical and desalination technology-based industries.

Strong endorsement came from the USSABC president and CEO Edward Burton, who said: “Yanbu’s competitive package of land, utility and infrastructure services coupled with its access to Middle Eastern, European, Asian and African markets make it a must for consideration for any international firm looking to expand its footprint in the Gulf region.”

A plant of the Saudi International Insulation Manufacturing Company, a joint venture between Alghanim Industries and Compagnie de Saint-Gobain, has been built in Yanbu to produce stone wool in a specially designed process allowing high flexibility with the lowest environmental impact (zero waste). Annual capacity will be 60,000 tonnes of stone wool insulation materials.

The Royal Commission is happy to host the plant because it is in line with national objectives related to raising energy use efficiency. It is keen that other industries in Yanbu pursue green production.

In support of its green policy, the Royal Commission plans to set up a solar plant in Yanbu Industrial City with a capacity of 50 MW. A feasibility study is under preparation.

Yanbu’s supply chain sector marked the award of a contract by National Petrochemical Industrial Company (Natpet) to chemicals logistics service provider SA Talke.

The three-year deal, which takes effect in January 2016, involves on-site services for polypropylene (PP) at Natpet’s production unit in Yanbu Industrial City. SA Talke will also be responsible for warehouse management and product handling under the terms of the contract.

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