Sabic Moves Ahead on LAOs


Saudi Basic Industries Corp. announced last week that it is proceeding with plans to build a 150,000-metric-ton linear alphaolefin plant in Saudi Arabia, having awarded the construction contract to a German firm.

The plant, to be built on the Persian Gulf coast, in Jubail Industrial City, is scheduled to begin operating in the third quarter of 2006. Sabic awarded a contract covering engineering, procurement and construction to Linde AG, but did not disclose the cost of the project.

Sabic said the plant will use a technology called alpha-Sabline, which it developed in cooperation with Linde. The companies claim it incurs lower construction and operating costs than conventional methods of making LAOs and allows greater flexibility in the combination of LAOs that are produced.

Jubail is the site of a 1 million metric ton petrochemical complex that is currently being constructed and which will be operated by a Sabic subsidiary, Jubail United Petrochemical Co. Jubail has previously pegged the cost of the project at $1.2 billion and said it would produce glycol ethylene and polyethylene, as well as LAOs. Parts of the plant are scheduled to begin operating later this year.

LAOs are the main building block for PAOs. They are also used in lube oil additives, surfactants and oil field chemicals, and as co-polymers to improve the mechanical performance of high- and linear low-density polyethylene.

The LAO market currently suffers from overcapacity resulting from the opening of several new plants the past few years. BP, one of the worldslargest producers of LAOs, said recently that it plans to sell its olefins business, including three plants with combined annual capacity of 1.1 million tons.

Headquartered in Riyadh, Sabic is one of the worlds largest petrochemical companies, operating 16 plants through its subsidiaries and joint ventures. The Saudi Arabian government owns a 70-percent share of the company.

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