KHOBAR, Saudi Arabia May 13 Saudi Basic
Industries Corp (SABIC) expects its planned oil-to-chemicals
plant to start operations by the end of 2020, it said on
SABIC, one of the world's largest petrochemical groups, said
it expects to use around 10 million tonnes of crude oil annually
as feedstock for the plant. That is equivalent to 200,000
barrels per day, or an average-sized oil refinery.
Development of the Saudi petrochemical sector is part of
Riyadh's strategy for diversifying the economy away from heavy
dependence on crude export revenues.
In its first public announcement on the project, SABIC did
not say where the complex would be located, how much it would
pay for the oil or if the crude would be subsidised. It did not
specify which type of the crude it would use either.
In a statement to the stock exchange, SABIC said it was in
the final stages of preliminary studies for the industrial
complex in Saudi Arabia which will help provide around 100,000
direct and indirect jobs for Saudis.
Oil Minister Ali al-Naimi said in March the kingdom would
build its first plant able to turn crude oil directly into
chemicals without having to refine it first.
He said the plant would be located in Yanbu, Saudi Arabia's
second-largest industrial hub on the West coast.
It is not clear if the development of such a project is
linked to finding alternative liquid feedstock to help meet a
shortage of gas supplies, which SABIC blamed last month for
limiting its expansion plans within Saudi Arabia.
Chemical companies usually process gas or refined oil
products into petrochemicals, such as ethylene and propylene,
that are then used to make plastics and other products. Using
oil as a feedstock is also more expensive than cracking gas.
ExxonMobil started up the world's first plant that
processes crude oil into chemicals in Singapore last year.
State-run oil giant Saudi Aramco has been researching ways
to make ethylene and propylene directly from oil for years to
grow its petrochemicals business.
(Reporting by Reem Shamseddine; Editing by Mark Potter)