A 32-year-old partnership is about to enter a new dimension. Saudi Basic Industries Corporation (Sabic) and Shell, joint venture partners at Saudi Petrochemical Company (Sadaf), Jubail, have announced they are progressing plans for the expansion of various projects at Sadaf.

They are also looking to expand their partnership beyond Saudi Arabia.

“Both parties are developing a full range of polyols (a polyurethane building block) and styrene monomer propylene oxide (SMPO) plants at the existing Sadaf site, which is located in one of the world’s largest and most competitive petrochemical complexes – the Al Jubail industrial zone on Saudi Arabia’s eastern coast,” said a statement. Sabic and Shell will jointly conduct the necessary studies to implement the project, it added.

The proposed full range of polyols and SMPO plants will be the first of their kind in the Middle East. The assets will employ Shell’s proprietary polyols and SMPO technologies to produce chemical building blocks for the polyurethanes industry and petrochemicals sector in the Middle East and beyond. The partners are committed to the polyurethanes, styrene, propylene oxide and derivatives sectors, and have access to leading technologies as major international suppliers.

Mohamed Al Mady, Sabic vice chairman and CEO, commented, “We are pleased to be deepening our partnership with Shell. This investment will respond to demands for solutions from our global customer base. These sectors include building and construction, automotive and transportation, furniture and bedding, sports goods, food packaging, cold chain and refrigeration, and home appliances industries. Our polyurethane solutions will offer strength and flexibility, variable rigidity and insulation properties in a wide range of applications.”

Developing the polyurethane sector in Saudi Arabia will contribute to necessary energy savings and create job opportunities for the growing skilled workforce.

SADAF OUTPUT HIGH
Owned jointly by Shell Chemicals Arabia LLC and Sabic, Sadaf is one of the oldest petrochemicals ventures in Saudi Arabia. The 50:50 JV was established in 1980 and began operating in 1984. Sadaf produces some 4.7 million tonnes of building-block petrochemicals a year, primarily sold to customers in the Asia Pacific region. They include ethylene, crude industrial ethanol, styrene monomer, ethylene dichloride, caustic soda, and methyl tertiary butyl ether.

Ben van Beurden, executive vice president for Shell Chemicals, said, “Sabic ranks among the world’s top petrochemical companies and operates in over 40 countries. We are delighted to expand our successful, long-standing partnership of more than 30 years. The proposed SMPO and polyols plants will help strengthen Shell’s global propylene oxide and polyols manufacturing capacity, boosting our supply to customers worldwide.”

Sabic is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilisers. The company recorded a net profit of SR29.24 billion ($7.80 billion) in 2011. Sales revenues for 2011 totalled SR189.90 billion.

Shell Chemicals has been a leading player in the manufacture and sale of bulk petrochemicals to large industrial customers for more than 80 years. It has world-class manufacturing plants in major markets around the world and a robust product portfolio underpinned by strong technical heritage and market-leading proprietary technologies, innovation and excellent customer relationships. For two consecutive years since 2011, Shell Chemicals has been ranked the world’s sixth largest petrochemical company based on turnover.

In 2011, it sold more than 18 million tonnes of product and achieved record earnings of over $2 billion.