“The Al-Jubail Petrochemical Company (Kemya) owns the petrochemical plant complex. The company is a joint venture between Saudi Arabian Basic Industries (Sabic), owned by the Saudi Arabian Government, and ExxonMobil” (“Al Jubail Petrochemical plant, Saudi Arabia”). Both Sabic and Exxon hold half of the Al-Jubail Petroleum Company. Total estimated cost for project is $1000m. Al-Jubail project is the result of company’s extensive Research and Development activities carried out to add more value to its products.” Sabic is the biggest petrochemical producer in the Middle East and has been concentrating mainly in Saudi Arabia since its foundation in 1976.” (“Al Jubail Petrochemical plant, Saudi Arabia”). “ExxonMobil is the second largest ethylene manufacturer in the world. In polyethylene, the company is the leading world supplier. It is also a major producer of oil and gas, as well as many other petrochemical products” (“Al Jubail Petrochemical plant, Saudi Arabia”).
Sabic is driven to expand in the advent of increasing raw material prices and decreasing product prices. Saudi companies compete with European and Asian Petrochemical companies where Saudi companies are at advantage regarding the lower raw material prices and at a disadvantage regarding higher transportation costs. Petrochemicals companies depend largely on ethane and propane feedstock. Light Naptha is one feedstock that has not been exploited sufficiently in Saudi Petrochemicals industry. “Worldwide global shift in the use of feedstock in this industrial sector will be reflected in the Saudi petrochemical industries. As the world trend is to maximize the utilization of under-utilized petroleum resources, one would expect optimization of LN utilization in Saudi Arabia in the near future” (Dawoud). With the emergence of Aramco and other emerging small companies, the competition has toughened for Sabic.
Works cited
“Al-Jubail Petrochemical plant, Saudi Arabia”. chemicals-technology.com. ChemicalsTechnology, n.d. 2010. Web.
Redwan, S. Dawoud. “Supply and demand of light Naphtha as potential petrochemical feedstock in Saudi Arabia.” Informaworld.com. Informaworld, Petroleum science and technology. Volume 17. 7 &8 (1999) 857-876 Web.