Petrochemical projects continue to dominate the commencement of upcoming projects across the oil and gas value chain in Saudi Arabia, accounting for around 60% of the total projects starts expected during 2022 to 2026, says GlobalData, a data and analytics company.
GlobalData’s report, Middle East Oil and Gas Projects Outlook to 2026 – Development Stage, Capacity, Capex and Contractor Details of All New Build and Expansion Projects, reveals that petrochemical projects would witness the highest projects starts in Saudi Arabia (45), followed by midstream (15), upstream (fields) and refineries with eight and seven, respectively. Of the 45 petrochemical projects expected to start operations in the country by 2026, 37 would be new builds and the remaining are expansion projects.
Soorya Tejomoortula, Oil & Gas Analyst at GlobalData, comments: “Petrochemicals are very important for Saudi Arabia to diversify from the upstream sector and reduce its dependence on crude oil exports for revenues. The expansion of its petrochemicals sector helps the country to increase its manufacturing base and creates local employment. The state-owned oil company, Saudi Aramco, already acquired a 70% stake of Saudi Basic Industries (SABIC) as part of its strategy to boost growth in the downstream sector and reduce its economy’s reliance on crude oil exports.”
Among Saudi Arabia’s upcoming petrochemical projects, Saudi Aramco Total Refining and Petrochemical Company, Al-Jubail Ethylene Plant, is a major project with a capacity of 1.50 mtpa and costing USD 1.6 billion. The plant provides feed stock to other petchem and speciality companies in the Jubail industrial city.
Tejomoortula adds, “Saudi Arabia’s aggressive investments in the petrochemicals sector is part of its Vision 2030 plan, where in the country aims to reduce its dependence on the upstream sector and venture into other segments in order to diversify its economy.”