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Sabic to take over most of Saudi Aramco petchem sales
4/29/2021 12:00:00 AM

Saudi Arabia's state-controlled petrochemicals producer Sabic will soon be responsible for the marketing and the sale of most of Saudi Aramco's petrochemicals and polymer products, officially becoming the chemicals arm of the oil giant.

Aramco will also transfer responsibilities for its Malaysia-based Pengerang Petrochemical Company (PRefChem), Saudi-based Sadara and South Korea-based S-Oil joint-ventures to Sabic, the firms said today.
The new PRefChem facility in Malaysia will have the capacity to produce 750,000 t/yr of polyethylene (PE) and 900,000 t/yr of polypropylene (PP) once it comes on stream later in this year, while S-Oil operates a 405,000 t/yr PP unit in south Korea.
Sabic had already announced last month that it will begin marketing Sadara Chemical products in the Middle East from 1 July with US petrochemical producer Dow, Saudi Aramco's joint-venture partner.
Market participants were expecting the new organisation, which is set to be implemented in phases this year, ever since Aramco completed the acquisition of a 70pc stake in Sabic in June last year.
Aramco will pay the sovereign wealth Public Investment Fund (PIF) $69.1bn for the purchase, in installments until 2028.
Under the firm's new plans, Saudi Arabia's state-controlled Aramco Trading (ATC) will take over the responsibility for the offtake and resale of a number of Sabic aromatics and fuel products, including benzene, MTBE, gasoline blending components and EU cracker feedstocks. Sales of Aramco paraxylene (PX) will remain with ATC.
After completing the consolidation of petrochemical products, Sabic will exclusively handle the sales and marketing of high-density PE (HDPE), linear low-density PE (LLDPE), low-density PE (LDPE), PP copolymer, PP homopolymer, PP terpolymer, ethylene vinyl acetate copolymer(EVA), PMMA, PA6, MEG, DEG, TEG, mono-ethanolamine (MEA), di-ethanolamine (DEA), tri-ethanolamine (TEA), ethylene diamine (EDA), diethylenetriamine (DETA), ortho-toluenediamine, polymeric methylene diphenol diisocyanate (PMDI), toluene diisocyanate (TDI), propylene glycols, polyols, propylene oxide, MMA, butyl glycol ether, acetone and phenol.
The commercial agreement for PetroRabigh, a joint venture between Japanese trading house Sumitomo and Aramco, was not mentioned in today's announcement. PetroRabigh's derivative petrochemical units include production capacity for 700,000 t/yr of PP, 600,000 t/yr of LLDPE/ HDPE, 300,000 t/yr of HDPE, 160,000 t/yr of LDPE, 400,000 t/yr of benzene and 1.3mn t/yr of PX.
Some existing marketing and sales activities were also excluded. These were Aramco's excess production of olefins, Netherlands-based producer Arlanxeo's rubber and elastomer, US-based producer Motiva's cyclohexane, propylene and ethylene, and S-Oil's domestic marketing and sales in South Korea.
The shipping of various products also comes under the plan. "Responsibility for the commercial aspects of liquid bulk marine shipping services will be consolidated under ATC (including chemicals and feedstock), while responsibility for the shipping of all solid products and customer product delivery will be consolidated under Sabic," the firms said.
Source: Argus