Page 9 - DMEA Week 13 2020

DMEA PETROCHEMICALS DMEA
Saudi Arabia plans new petrochemicals facilities
SAUDI ARABIA
Commercial production is scheduled to start
in the second half of 2024.
SAUDI-LISTED Advanced Petrochemical Co. (APC) has signed a deal with South Korea’s SK Gas to build and operate plants for propane dehydrogenation (PDH) and polypropylene (PP) in the kingdom’s industrial city of Jubail.
The project is valued at $1.8bn.
In a stock filing, APC said its subsidiary Advanced Global Investment had formed a joint venture (JV) with SK Gas for the pur- pose. The plants will be capable of produc- ing around 726,000 tonnes per year (tpy) of polypropylene.
According to APC, 25% of project financing will comprise equity from shareholders and 75% from the new JV, backed with borrowing from lenders. APC will have an 85% stake in the JV, while SK Gas will take 15%.
APC also said it had signed a conditional agreement with authorities for land allocation for the project.
The Saudi firm has penned an agreement with Lummus Technology to license out the US com- pany’s CATOFIN technology for the PDH plant.
Licence agreements have also been signed with Basell Poliolefine Italia of Italy for the supply of SPHERIPOL and SPHERIZONE technologies for the PP facility.
Propane feedstock for the plants will be sup- plied by Saudi Aramco on a long-term basis. Construction on the plants is due to start in 2021, with commercial production commencing in the second half of 2024.
Saudi Arabia wants to expand its petrochem- icals production to diversify its export revenues, which are mostly generated by oil, and make its economy more resilient to changes in oil prices. Aramco is working to close the takeover of Riyadh-based petrochemicals giant SABIC, with the deal having secured clearance from EU regulators in late February.
Conditions on the global petrochemicals market are far from ideal for supporting new investments, however. The sector was already reeling from oversupply and a rut in economic growth before the coronavirus (COVID-19) pandemic. ™
STORAGE
Fujairah oil storage hub reaches full capacity
MIDDLE EAST
STORAGE tanks in the UAE’s flagship Fujairah oil hub have now reached full capacity for both crude oil and petroleum products, Reuters reported on April 1.
The hub at the entrance to the Strait of Hor- muz is one of two major ports in the region, alongside Sohar in Oman, and is a key refuelling point for tankers transporting crude out of the Middle East. The Fujairah emirate aims to boost storage capacity to 14mn cubic metres this year, from 10 mcm previously.
Storage operators everywhere are exploit- ing weak oil prices to add to stockpiles, helping to prop up oil prices at a time when coronavi- rus (COVID-19) lockdowns are cutting into demand and Russia and Saudi Arabia are pre- paring to ramp up production. But the risk is that prices will tumble to new lows once this capacity is filled up
Abu Dhabi’s national oil firm ADNOC oper- ates storage and loading facilities at Fujairah and
is constructing a new oil storage site under the area’s mountains, due to be completed this year.
UAE-based Brooge Petroleum and Gas Investment (BPGIG) has also signed a deal in February to acquire an extra 450,000 square metres of land to expand its storage capacity by up to 3.5 mcm, from 1 mcm this year. This would position it as the largest storage operator in Fujairah.
At the port of Abu Dhabi, Saudi Arabia-based Arabian Chemicals Terminals (ACT) is inter- ested in developing the emirate’s first greenfield commercial bulk liquid storage terminal.
With land storage in the UAE and globally reaching the brim, oil traders are looking to store as much as 80mn barrels of crude in tank- ers at sea, sources told Reuters on April 1. This is similar to what occurred after the 2008 finan- cial crisis, when over 100mn barrels of oil were temporarily stored at sea following a collapse in demand. ™
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