PIB Plant Planned in Saudi Arabia

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South Korea’s Daelim Industrial will build an 80,000 metric tons per year polyisobutene plant in Jubail, Saudi Arabia, that is expected to come on stream in 2024, under a memorandum of understanding reached with Saudi Aramco and Total.

This marks the first time PIB will be produced in Saudi Arabia.

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The front-end engineering and design for the PIB plant will start this month and is scheduled to be completed in the fourth quarter of 2019, according to state-owned oil company Saudi Aramco. The new petrochemical facility will use feedstock from the neighboring Amiral complex in Jubail and once finished will serve markets in Europe, Middle East and Asia. The plant will use Daelims PIB technology to produce a series of products from conventional PIB to highly reactive PIB. The project will be part of a larger petrochemical complex at Amiral and is designed to give Daelim access to competitive feedstock and energy, Aramco said in a press release.

Highly reactive PIB is a chemical intermediate used in the production of high-performance lubricant and fuel additives, including additives for sludge prevention. It speeds the producing of derivatives like detergents and dispersants used in lubricants. PIBs can also be used as base stock substitutes for bright stock and have seen growing demand in recent years as bright stock supply has declined. PIB based polymer technology is frequently used to replace API Group I bright stock and high-viscosity base oils in automotive driveline and industrial markets.

Aramco is seeking to double down on its downstream strategy after announcing in November it would invest $160 billion over the next decade in a global downstream push as the Kingdom attempts to pivot away from its dependence on upstream refining revenues. Speculation also suggests the renewed emphasis on downstream could see the oil giant bolster its base oils business. Aramco currently produces API Group I and II base oils under the 70-30 Luberef joint venture with Jadwa Investments, under which Aramco is the majority partner. Two plants – one in Jeddah and the other in Yanbual Bahr – have a combined capacity to produce 358,000 t/y of Group I and 708,000 t/y of Group II base oils.

Saudi Aramco did not reply by deadline to questions about ownership structure of the agreement or likely lubricant strategy.

The agreement with Daelim comes just days after Saudi Aramco announced its intention to invest up to $1.6 billion for a 19.9 percent stake in South Korean refiner Hyundai Oilbank, which is a partner in Hyundai Shell Base Oil, a 50-50 joint venture with Shell which produces API Group II base oils.