Al Jubail (AR RAZI 4) Methanol Plant, Saudi Arabia

The new plants are located in the methanol complex at Al Jubail in Saudi Arabia. The first methanol plant was constructed in 1983, and the latest addition will be the biggest at the complex. The site is now the biggest single complex methanol production site in the world. In addition to the methanol facility, there are facilities for butanediol, acetic acid and maleic anhydride. The plant complex is owned by Saudi International Petrochemical Company (SIPC) through its subsidiary the Saudi Methanol Company.

The new plants were initiated in the second half of 1999, and the project is slated for completion in 2003. The cost of the methanol plant is $227m, out of a total investment of $730m. The capacity of the new methanol plant will be approximately 850,000t/yr, and it will produce 140,000t/yr of carbon monoxide. Large as this seems, the new plant is roughly the same size as the existing number three plant. This will give the company a total capacity of 3.2 million tonnes per year, bringing SABIC's total capacity to four billion tonnes per year.

SUPERCONVERTER METHANOL SYNTHESIS PROCESS

The synthesis process, converting feed gas to methanol, is the key operation in the production of methanol. Mitsubishi Gas Chemical and Mitsubishi Heavy Industries jointly developed the new plant's methanol synthesis process. The newly developed Superconverter process recovers heat from the reaction and uses it to maximise the catalyst process. According to the companies, that results in a 10% reduction in overall energy consumption. Mitsubishi's technology is key to the success of the plant. Along with the superconverter processing plant, the facility expansion will include new boilers and water purifying apparatus and a giant chemical storage tank.

ACETIC ACID AND BUTANEDIOL PLANTS

The Al Jubail plant complex will also have an acetic acid plant with a capacity of about 200,000t/yr. It will use the nearby methanol facilities as a source of feedstock for its own processing.

The butanediol plant, with a capacity of 50,000t/yr as well as a 10,000t/yr maleic anhydride unit, was built by Gulf Advanced Chemical Industries Company (Gacic). These were built and operated by a separate company. However, the al Zamil group is a major shareholder in both, and is thought to want to merge the two firms together. The letter of intent to build the plant was signed by Huntsman and Kvaerner Process in the first half of 1999.

METHANOL PRODUCTION IN SAUDI

Much of the methanol from the Saudi plant goes to the Far East, with about half of the production from the new plant intended for the Japanese market. The methanol is used as a material for a variety of plastics, paints, synthetic fibres, and chemicals. Methanol prices recovered somewhat during 2000, thanks to the enforced closure of some facilities in Trinidad & Tobago.

Saudi Arabia is keen to develop its petrochemical industry further, partly for employment reasons, and partly to insulate itself from the fluctuations in price that particularly damage companies that rely overly on the sales of a commodity product. Although this factor has eased somewhat as oil prices have gone back up, a less diversified economy would still be very dependent on changes in market demand.

AL ZAMIL GROUP

SIPC is a new private sector enterprise, capitalised at $133m, whose chairman is Abdulaziz al-Ohali of the AH al-Zamil Group, which has a 15% stake. Other investors include the Saudi-based Arab Investment Company and Sara Development Company, plus Kuwait's National Industry Group and Dubai Investments. It was formed in July 1999.

The creditworthiness of Sabic has been somewhat damaged by the rescheduling of debts by some of its subsidiaries. This has had an effect not only on the subsidiary, but also on Sabic itself and its other ventures. Whilst the company can still obtain credit, it tends to be at a higher rate of interest. However, this may also be linked to a perceived reduction in the Saudi government's willingness to give subsidy and other support to the Sabic group in the event of difficulty with repayment.

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