Saudi International Petrochemical Company (Sipchem) took another step forward in its mission to produce value-added products with the signing of an interim agreement with Eastman Chemical Company for its proprietary acetyl technology.

Sipchem plans to build a world-scale acetyl complex as part of an expansion of its petrochemical facilities in Jubail Industrial City.The  acetyl complex is planned to be ready in 2008.
Under Eastman’s technology, Sipchem will be able to produce acetic acid and acetic anhydride at a cumulative capacity of 460,000 tonnes per year (tpy). The agreement also calls on Eastman to provide technical support and marketing of all acetic anhydride produced at the facility. Sipchem will use most of the acetic acid it produces for the manufacture of vinyl acetate monomer (VAM) with Dupont technology.
“This agreement strengthens our position as a leading global supplier of acetic anhydride to the merchant market,” said Ron Lindsay, vice president and general manager of Eastman’s intermediates business, part of the company’s Eastman Division.  “The geographic position resulting from this relationship with Sipchem and the significant flexibility of Eastman’s acetyl co-production technology will allow us to reliably meet the long-term, growing needs of our global acetic anhydride customers, particularly within the Asia Pacific region.”
Sipchem president Ahmed Al Ohali said the acetyl complex would provide farther growth opportunities for Sipchem and represent its vision for developing investments in the petrochemical industry to produce value-added products. “The world-class acetyl technology from Eastman and our integrated position at Al Jubail will position this facility to serve both Middle East and regional acetyl needs,” he added.
Saudi Aramco has consented to make long-term supplies of natural gas feedstock for the complex. The methanol feedstock for the acetic acid plant will be sourced from Sipchem’s affiliate International Methanol Company (IMC) whose 1 million tpy plant is scheduled to come on stream in January 2005.  Sipchem is also building a 75,000 tpy butanediol plant, which is scheduled to start operations in December 2005.
IMC is a joint venture between Sipchem (65 per cent) and the Japanese consortium Japan Arabia Methanol Company (35 per cent). The consortium has as constituents Mitsui, Mitsubishi, Daicel and Lino.
Most of the methanol production will be exported worldwide. Japan Arabia Methanol Company has a long-term contract for the marketing and offtake of methanol. Some of the methanol will be used for the butanediol plant.
The butanediol plant will have an additional facility to produce tetrahydrofuran. Sipchem is developing the plant under its affiliated outfit named Gulf Advanced Chemical Industries Company, a joint venture with Davy Process Technology, Huntsman, Al Babtain and Al Masry and in which Sipchem is the main equity partner.
All the butanediol will be exported. Sipchem expects to sell around 1,000 tpy to 2,000 tpy of tetrahydrofuran in the local and GCC markets.
 Sipchem’s main shareholder is Islamic Development Bank with 23 per cent of the total equity. Other shareholders include the Zamil Group of Saudi Arabia and National Industries Group of Kuwait.