March 28, 2025 – The Ministry of Energy in Saudi Arabia has officially greenlit the feedstock supply plans for two steam cracker and derivative projects located in Jubail, with a combined annual production capacity potential of 6.6 million tonnes. The associated plans have also been made public.
Tasnee National Industrialization Co. will undertake the construction of an integrated project with an annual capacity of 3.3 million tonnes of petrochemical products. According to revelations made by Tasnee on February 26th, the company aims to commence operations at this new integrated facility in the fourth quarter of 2030. Having secured approval from the Saudi Ministry of Energy, Tasnee will utilize a specified quantity of ethane, propane, and butane as feedstock to establish an industrial complex in Jubail, incorporating a world-class high-capacity ethylene production pyrolysis unit. The planned products from this facility include ethylene, high-density polyethylene (HDPE), linear low-density polyethylene (LLDPE), and methyl tertiary butyl ether (MTBE), among others. For the first time in the region, it will also produce phthalate-free plasticizers, novel polyether polyols, and ethylene oxide-propylene oxide copolymers for specific applications and specialized products, significantly enhancing the value-added component of Saudi Arabia’s petrochemical industry.
Separately, AsiaMB has learned that on February 27th, Sipchem and LyondellBasell Industries NV announced the formation of a joint venture to develop an integrated facility with an annual capacity of 1.5 million tonnes of ethylene and 1.8 million tonnes of derivative products, including base and specialty polymers. Currently, the specific startup date for the project has not been disclosed. Both parties have stated that Sipchem will hold a 60% stake in the joint venture, with LyondellBasell owning the remaining 40%. Sipchem plans to develop the complex in phases to maximize value-added in the medium to long term.
Earlier, Saudi Aramco raised feedstock prices for the second consecutive year on January 1st, prompting companies such as Sipchem and Tasnee to warn of increased production costs. Several client companies anticipate a 1% to 3.7% increase in sales costs. Feedstocks like ethane and propane constitute the primary operational costs for Saudi chemical producers, and this price hike has had a notable impact on them.
As part of Saudi Arabia’s Vision 2030, state-owned Saudi Aramco is expanding its production of petrochemical products through its chemicals subsidiary SABIC and other domestic and foreign joint ventures. This falls under a broader downstream business expansion and serves to create a stable end market for future crude oil reserves. Over the coming decades, as demand for transportation fuels is projected to decline, petrochemical products are expected to become the primary driver of crude oil demand growth.