Saudi Aramco’s role in the Kingdom’s chemicals industry is growing and accelerating with a strategic shift in focus designed to increase the local economic footprint of the company’s chemical investments.
Chemicals production capacity in the Kingdom increased by almost 10 percent from 2007 to 2012, allowing the company to capture additional value from its hydrocarbon resources, says Warren Wilder, vice president of Saudi Aramco Chemicals in a recent interview during the annual Gulf Petrochemicals and Chemicals Association (GPCA) forum.
However, it is not enough anymore for petrochemical companies in the GCC states (Gulf Cooperation Coouncil) to maintain a steady output of products that are exported overseas for conversion and manufacturing. These products should form the basis for local conversion industries, said Wilder, which would offer “wide-ranging socioeconomic benefits, including the creation of employment opportunities, and the growth and diversification of national economies.”
Saudi Aramco is actively engaged in integrating its chemicals production with refinery assets, and shifting its focus to conversion industries. Saudi Aramco’s joint venture, Petro Rabigh, has a conversion park associated with it. The Rabigh PlusTech Park was the first industrial estate for conversion industries in the Kingdom that is fully occupied with local conversion and support industries.
To further promote local conversion, Saudi Aramco’s joint venture with Dow Chemical Company, Sadara, is developing a plug-and-play PlasChem Park, which will house downstream chemical manufacturers and plastics conversion industries. Wilder, who sits on Sadara’s Board of Directors, said the chemical plant will begin delivering products in the second half of 2015 that will complement inputs available locally from other downstream facilities in the Kingdom.
Saudi Aramco is also involved in chemicals manufacturing outside the GCC. “China is a large and growing market for chemicals and Aramco Asia already has a footprint in that country,” said Wilder. “For almost two years now Aramco Asia has been successfully marketing polymer products from the Fujian Refinery and Petrochemical Company (FREP).” The company is also in the process of seeking regulatory and other approvals for increasing its stake in S-Oil, a Korean integrated refinery and petrochemical complex, to 63.7 percent to enhance its presence in the growing Asian markets.
Saudi Aramco continues to look for opportunities in growing markets. Many of these opportunities will involve the integration of petrochemicals with the company’s growing international refinery portfolio.
“Our vision is to build an integrated downstream portfolio encompassing the entire value chain from crude supply, refining, petrochemicals and lubes to closely linked marketing and distribution channels, supported by world-class innovation and technologies,” concluded Wilder.