Chemical Engineering News    December 7, 2005

Aiming For Number One

Since Saudi Basic Industries Corp. (SABIC) acquired DSM's petrochemical operations in mid-2002, it has been busy coming to grips with this European-based petrochemical business. Now, its European management team has laid out how it intends to build its business in the region.

And the answer is clear:
SABIC Europe is aiming to be one of the top two marketers of polyolefins in Europe.

The company currently is the fourth largest seller of polyolefins in Europe. It also occupies the same position
worldwide, selling roughly 4.9 million tons of polyolefins per year, behind ExxonMobil at roughly 6.5 million metric tons, Dow Chemical at about 7.5 million metric tons, and Basell at nearly 9.0 million metric tons.

SABIC is now finalizing plans for the big project it will rely on to fulfill its European goal:
its fifth ethylene cracker, envisaged for its site in Geleen, the Netherlands. That cracker and a series of new plants and expansions are part of the company's Europe 1 project to expand Geleen and its site in Gelsenkirchen, Germany.

Between Geleen and Gelsenkirchen, SABIC Europe has a total
polyethylene capacity of 1.48 million metric tons per year - 47% of SABIC's global polyethylene capacity - and 1.09 million metric tons of polypropylene, 65% of total SABIC polypropylene capacity. The feedstock at Geleen is from the company's own naphtha crackers - crackers No. 3 and 4 are its current workhorses, supplying a total of 1.25 million metric tons of ethylene and 675,000 metric tons of propylene. Production in Gelsenkirchen depends upon feedstock secured under a long-term contract from the neighboring BP cracker.

But beyond that, SABIC Europe sells 2 million metric tons of polyethylene and 1.2 million metric tons of polypropylene, some 100,000 metric tons of other polymers, and 2.5 million metric tons of other chemicals, including ethylene glycol, methanol, styrene, and butadiene. These products, and the difference over European production, are imported from SABIC's sites at Yanbu and Al Jubail in the Saudi Arabian peninsula.

The Europe 1 project - budgeted at nearly $1.8 billion - is set to start up in 2009, says Frans Noteborn, chief executive officer of SABIC Europe. It will offer the company full backward integration, he says, while helping lock in its leadership position. The project is on track, he emphasizes, and he and his management team hope to wrap up the final decision on engineering and construction early next year.

BASF built Europe's last new cracker in 1994 in Antwerp, Belgium, points out Sebastiaan Kostering, SABIC Europe's business director for olefins and intermediates. So although there have been expansions through process improvements, growth in European ethylene supply has not kept pace with growth in demand, he says.

The result is that the industry is running its crackers at above 95% effective capacity utilization. SABIC Europe, Kostering adds, has been running at nearly 100%.
It's the whole concept of SABIC: We produce ethylene, we use ethylene, we import ethylene, we sell ethylene. So we are always able to run our crackers flat out.

The Europe 1 project will add another 400,000 metric tons of ethylene capacity to the company's European slate. But even more important, Noteborn says, the proposed cracker will be a propylene machinethat will use metathesis technology to produce up to 620,000 metric tons of propylene. It will also make benzene and ethyl tert-butyl ether.

Looking five years ahead,
propylene will not be tight?it will be very tight,Kostering says. The industry is predicting a global demand increase over that time of 14 million metric tons of propylene, he points out. But current industry plans call for only 5 million more metric tons from new crackers and cracker expansions, and another 4 million metric tons through propane dehydrogenation and metathesis. Projected cracker propylene output is modest because, unlike the proposed Geleen project, most new crackers are based on ethane and dont turn out propylene.

Of the other potential source of propylene - petroleum refineries -
We have no idea what oil refineries are doing,Kostering concedes. They will run propylene through their reformers for gasoline until the chemical market can offer an attractive enough price to compete.

The Europe 1 project will give SABIC Europe the opportunity to increase the scale of its polyolefin plants. After Europe 1, we will scrap all our smaller units. Only the very largest will be left,Noteborn says. That, in turn, will solidify the company's top spot in polyolefin capacity per site: SABIC Europe already boasts more than double the average plant size per site of its nearest competitor, Borealis.

The company acknowledges the two other announced European ethylene additions -
Ineosplan for an 800,000-metric-ton facility in Wilhelmshaven, Germany, by 2008 or 2009; and BASF's 300,000-metric-ton expansion in Antwerp by 2007. But Noteborn and his team are not worried by the competitive threat.

SABIC Europe aims to have full backward integration into olefins. It is working on cost improvements. And it intends to expand its existing business platform, through expansion in the Netherlands and Germany, as well as through increased imports from Saudi Arabia.

In fact, Kostering adds, SABIC's strategy
is to develop undisputed cost leadership and complementary growth positions in Europe.Given that SABIC itself began production only a little more than two decades ago, this goal may be well within reach.

Sep 17 2007 Evening Gazette

SABIC UK, planning bid for new PP plant

A Teeside, Wilton chemical company, which earlier this year said it may invest £200m locally in a new plant, has applied for planning permission for the project.

A spokesman for SABIC said while no decision had yet been made on whether the investment would come to Wilton, the move would help speed up development if the region is successful.

Paul Booth, president of SABIC UK Petrochemicals, revealed earlier this year that the company was hoping to secure construction of a new polypropylene plant at Wilton.

He said Teesside was one of two locations the company was looking at for a third European polypropylene plant. SABIC has now applied to Redcar and Cleveland Council for planning permission to build a new plant.


Polypropylene. a light-weight plastic, ends up in products including car bumpers, kitchen appliances and power tools.

Saudi Basic Industries Corporation (SABIC) bought Huntsman's Teesside-based European Base Chemicals and Polymers business in a £372m deal at the end of last year.

The company is currently building a £200m polyethylene plant at Wilton.

"The final decision to proceed with the investment has not yet been taken," added the spokesman.

"It will be several months before a final decision is made.

"But we have applied for planning permission now to save time and put us in a better position to proceed with the project if we get the go-ahead."

Trade and Investment Minister Lord Digby Jones visited Wilton last week and paid tribute to the region's process sector.

He said he was "excited" at the various projects on site, including SABIC's new world-scale £200m polyethylene plant.

July 16, 2008 SABIC Europe

SABIC Europe announces plans to streamline its aromatics operations

SABIC Europe today announced plans to re-structure its Aromatics operations based on Teesside, UK following a wide-ranging review of the long-term viability of the business.

The plans involve closure of the Aromatics 2 unit at the SABIC UK Petrochemicals North Tees Site near Seal Sands and the Paraxylene plant at the Wilton Site near Redcar. The plans also include an upgrade of the remaining Aromatics 1 plant at North Tees.

The economics of the units planned for closure have become unviable and have forced SABIC Europe to face up to this difficult decision. The aim of the proposed way forward is to bring the total SABIC UK Petrochemicals site operational and commercial performance to a sustainable level.

Due to the closing of the plants, SABIC Europe will be restructuring its Aromatics product portfolio. David Hughes, Business Unit Director Aromatics & Oxygenates: "We recognize the impact of our actions on the European Market for our products. We will be working with our customers and suppliers over the coming weeks and in order to allow these discussions to start, we make this announcement at this early stage."

"On Teesside, SABIC UK Petrochemicals remains fully committed to its Olefins Cracker operations at Wilton and Cyclohexane production at North Tees. The current construction of the new world scale Low Density Polyethylene (LDPE) plant and a possible upgrading of the Aromatics 1 plant are important factors in helping to underpin this." concludes Hughes. In addition, SABIC Europe continues to operate its ongoing Aromatics business in the Netherlands.

The proposed closure of the Aromatics 2 and Paraxylene units is expected to affect approximately 200 operational and support positions. The main impact of this will be at the manufacturing facilities on Teesside, but the numbers also include some job reductions in SABIC Europe's support functions in The Netherlands. A clearer idea of job numbers will be known once the full details of the restructuring plans are worked out.

The impact on customers is under review and is subject to discussions with the relevant parties.

It is currently envisaged that the proposed closures will take effect by end 2008.