Saudi Chevron Petrochemical's benzene and cyclohexane plant in Jubail is the Kingdom's first entirely private chemicals manufacturing site. The plant was designed to produce 480,000 tonnes per year (tpy) of benzene and 220,000tpy of cyclohexane.

The company is a 50/50 joint venture between Saudi Industrial Venture Capital Group and Chevron Chemical Corporation. Chevron is private US company with several decades' experience and hopes to set up a number of joint ventures using Aromax technology in markets with rapid growth rates including Thailand and Venezuela.

The Saudi Industrial Venture Group is a joint stock company of 61 Saudi businessmen and five joint stock companies and plans o develop the private sector share of basic industries such as petrochemicals in the Kingdom.

The cost of the Saudi Chevron plant was $650 million. Saudi Aramco is supplying the natural gas feedstock. The plant was commissioned in the second half of 1999 and officially opened on February 1, 2000.

The new aromatics plant uses Chevron's Aromax technology. Chevron already has an Aromax plant at Pascagoula, Mississippi in the USA, but the new Saudi Arabian plant was expected to have better catalyst run times and conversion performance. Aromax was specifically developed to take advantage of low-quality feedstocks in order to make more expensive benzene. Chevron also has prior experience of cyclohexane plants, having a facility in Port Arthur, Texas, in the USA.

Saudi Chevron Petrochemical managed to raise $305 million as part of its efforts to get the deal off the ground. The credit facilities were jointly arranged by a consortium of Chase Investment Bank, Gulf International Bank, the Industrial Bank of Japan, Saudi Cairo Bank and the Saudi Investment Bank.

Benzene is a key ingredient for the styrene industry, which is expected to see long-term growth in the Saudi Arabian sector.

It is also hoped that the new plant will export cyclohexane to markets in the Far East and Europe.

The plant may also aid Chevron in a projected paraxylene extraction and processing plant in the Eastern Province for Saudi Aramco.

The proposal would cost in the region of $700 to $1,000 million. However, the limited margins available in aromatics may delay this project until the revival in Asian demand repowers the market. Saudi Chevron Petrochemical also has some fears about the prospects of securing mixed xylenes supplies from Saudi Aramco since the refining company has delayed a decision on whether to deliver. Without mixed xylene supply, the project will probably fall through. Should it go ahead, the product will have to be sent for export to the Indian Subcontinent and other markets.

The project is one of many petrochemical developments in the country in the past few years. The objective, from the Saudi Arabian point of view, is to diversify the Kingdom's economy. This helps to cushion it against low oil prices, which severely affect the government's revenues.

The petrochemical projects not only provide a wider range of products, they also move petrochemical operations in the Kingdom higher up the value chain, protecting margins. Another benefit is to provide jobs for Saudi Arabian nationals.

To this end the knowledge-sharing elements in the plant are welcome. Again, the government is eager to do this to limit social and political unrest as well as to develop the country.