Sharq Ethylene Glycol (EG) Plant, Saudi Arabia

In 2000 Sharq constructed an ethylene glycol plant and a de-bottlenecking plant for low-density polyethylene. The manufacturing complex is located in Al-Jubail Industrial City in Saudi Arabia.

Ethylene glycol plant and de-bottlenecking project

Sharq completed a $1.25bn construction programme of its third world-scale ethylene glycol (EG) plant and a plant to de-bottleneck its existing linear low-density polyethylene (LLDPE). It followed an earlier expansion programme which finished in 1994. The capacity expansion has made Sharq one of the largest producers of EG and LLDPE in the world.

"The capacity expansion has made Sharq one of the largest producers of EG and LLDPE in the world."

The engineering, procurement and contracting (EPC) contracts for the two plants were signed in the first half of 1998. The project's financing deal was agreed in the first half of 1999, and was completed during 2000. The total cost of the project was estimated at $1.25bn.

The project added an additional annual production capacity of 450,000t/y of ethylene glycol and 300,000t/y of low-density polyethylene (LLDPE). The ethylene glycol plant is the site's third.

The newest ethylene glycol plant is thought to be on the same template as the second ethylene glycol plant that the company opened on the site.

Sharq opened the second plant in 1993 as part of its earlier expansion programme, using Shell Chemical technology. The plant uses a new process for the cleaning of carbon dioxide obtained as a by-product in the large-scale manufacture of ethylene glycol. The process was developed by Sabic, as a result of its experience at the Eastman plant.

Petrokemya ethylene feedstock

The ethylene feedstock for the polyethylene production is provided through an agreement with Petrokemya, another Sabic company. Petrokemya expanded its ethylene capacity, in order to coincide with the onset of production at the new Eastman plants.

Japanese involvement

The contract for the new EG plant was signed in February 1998 with Chiyoda Corporation and the LLDPE de-bottlenecking contract was signed in May 1998 with Mitsubishi Heavy Industries Ltd (MHI). The strong element of Japanese financing in the project, through the Jexim loan, almost certainly gave these Japanese companies a head start in winning the EPC contracts.

The Bank of Tokyo-Mitsubishi, Ltd (BTM) arranged the project finance facility, and also acted as financial adviser. Riyadh Bank was the commercial facility agent and the Industrial Bank of Japan was appointed the intercreditor agent and trustee/security agent.

The borrowing met 70% of the project cost, the remaining 30% was met by internally generated funds. Given the project's importance to both countries and the involvement of a Japanese consortium as a key shareholder, the plan was structured with a special emphasis on Jexim funding. Jexim provided up to $750m of the project cost in direct loans.

The remaining $125m was raised by a group of commercial banks on a club basis. The participating banks were Riyadh Bank ($45m), Industrial Bank of Japan ($40m), Al Bank Al Saudi Al Fransi ($30m) and BTM ($10m).

New plant

"The third expansion project is underway to add 2.8 million tonnes of ethylene, LLDPE and HDPE capacity."

In September 2005 SABIC contracted the Korean engineering company Samsung to engineer, supply and construct a new 700,000t/y ethylene glycol plant for Sharq at the Jubail industrial city. This is part of the Sharq plant's third major expansion project since it first came on-stream in 1985.

The third expansion project is underway to add 2.8 million tonnes of ethylene, linear low density polyethylene (LLDPE) and high density polyethylene (HDPE) capacity to the plant. Previous expansions occurred in 1993 and 2001. Completion of the new ethylene glycol capacity enhancement project is scheduled for mid-2008.


Sharq, which is also known as the Eastman Petrochemical Company, was established in 1981. It is a joint venture between Saudi Basic Industries Corporation (Sabic) and the Saudi Petrochemical Development Company (SPDC, a Japanese consortium led by Mitsubishi Corporation). Sharq has also signed an agreement with Mitsui to exchange products and to export to Japan. Sharq is the world's largest single ethylene glycol manufacturing complex.